When representing the plaintiff in personal injury cases, attorneys are responsible for not only procuring a fair settlement but also ensuring that their client’s settlement is being awarded in a way that covers their medical bills and basic living expenses. As a result, structured settlements are often the preferred vehicle for disseminating funds at periodic intervals to the benefit of the personal injury victim. Although your client might believe that a lump sum payment is more beneficial to their current situation, personal injury victims can acquire a greater total payout by utilizing a structured tax-free settlement.
You are already responsible for procuring the personal injury settlement and ensuring all of your client’s needs are considered, so how can you get a tax-free annuity for your client on top of all of your other duties? Planning and executing a tax-free settlement requires time, experience, and hard work, which is why partnering with a settlement planner who can develop a plan that meets all of your client’s personal needs is essential for securing their future.
Personal Injury Plaintiffs Can Acquire a Tax-Free Settlement
Under 104(a) of the IRS codes, all personal injuries cases are 100 percent exempt from federal and state income taxes. A tax-free settlement provides a greater total payout and ensures that clients are being served according to their specific needs. Since payments are dispersed through a tax-free annuity, backed by a secure life insurance company, this type of settlement is safe and reliable for personal injury victims. If your client is awarded a structured settlement for a case that doesn’t involve a physical injury, they cannot benefit from a tax-free annuity. However, they can benefit from tax-deferred payments and competitive rates of return. Additionally, by partnering with a settlement planner, your client can benefit from a carefully developed settlement that considers their personal needs.
Arranging a Tax-Free Annuity
At Synergy Settlement Services, our settlement planners can arrange a tax-free annuity for clients who have received a settlement for a personal injury claim. The settlement fund awarded to the client is then purchased by a third-party company, a reputable life insurance company. From here, the settlement is dispersed through periodic payouts based on a carefully designed schedule. However, it’s important to employ a settlement planner directly rather than allow the defendant to bring one on board. If the defendant hires a broker, they will be legally obligated to work in the best interest of the defendant, which could limit your client’s ability to procure fair, steady payouts through the tax-free annuity. Ideally, the decision to utilize a structured settlement will consider any present and future medical needs, outstanding liens, bankruptcy issues, day-to-day expenses, future financial considerations, and eligibility for government benefits. A representative from Synergy Settlement Services can ensure that all of these details are carefully considered.
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Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.