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How to establish a structured settlement

I am an injured person

Introductory meetings to explain concepts, benefits, and limitations

Customized plan design based on analysis of personal needs

Explanation of how structures fit into existing financial plans

Support during negotiations

Plan revision based on negotiation progress

Coordination of payment delivery

I am a plaintiff attorney

Introductory meeting with clients (duty to inform)

Customized plan design based on client needs

Negotiation support

Offer valuation and market pricing

Pursuit of medical underwriting discounts in appropriate cases

Settlement document review

Post-closing client support (questions, changes of address, etc.)

I am a claim professional

File review (structure suitability)

Settlement proposal design

Negotiation support

Market pricing and “lock-ins” as needed

Pursuit of medical underwriting discounts in appropriate cases

Case funding and closing

Settlement document preparation, revision and closure

Third party assignment preparation, revision and closure

Funding vehicle purchase

Collection, coordination, and submission of closing documents

Post-closing claimant support (questions, changes of address, etc.)

Staff and retained counsel training

I am a defense attorney

Confirmation of client policies and procedures relating to structures

Presentation/explanation of settlement offers

Settlement offer revision and repricing

Negotiation support

Settlement document review and consultation

Appearance at formal hearings to respond to structure-related queries

I am a settlement fiduciary

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Conservators

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1725 DeSales Street, NW Ste 801
Washington, D.C. 20036
(800) 544 - 5533
info@jmwsettlements.com

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TITLE 26--INTERNAL REVENUE CODE

Subtitle A–Income Taxes

CHAPTER 1–NORMAL TAXES AND SURTAXES

Subchapter B–Computation of Taxable Income

PART III–ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME

Sec. 130. Certain personal injury liability assignments

(a) In general

Any amount received for agreeing to a qualified assignment shall not be included in gross income to the extent that such amount does not exceed the aggregate cost of any qualified funding assets.

(b) Treatment of qualified funding asset

In the case of any qualified funding asset–
(1) the basis of such asset shall be reduced by the amount excluded from gross income under subsection (a) by reason of the purchase of such asset, and
(2) any gain recognized on a disposition of such asset shall be treated as ordinary income.

(c) Qualified assignment

For purposes of this section, the term “qualified assignment” means any assignment of a liability to make periodic payments as damages (whether by suit or agreement), or as compensation under any workmen’s compensation act, on account of personal injury or sickness (in a case involving physical injury or physical sickness)–
(1) if the assignee assumes such liability from a person who is a party to the suit or agreement, or the workmen’s compensation claim, and
(2) if–
(A) such periodic payments are fixed and determinable as to amount and time of payment,
(B) such periodic payments cannot be accelerated, deferred, increased, or decreased by the recipient of such payments,
(C) the assignee’s obligation on account of the personal injuries or sickness is no greater than the obligation of the person who assigned the liability, and
(D) such periodic payments are excludable from the gross income of the recipient under paragraph (1) or (2) of section 104(a).
The determination for purposes of this chapter of when the recipient is treated as having received any payment with respect to which there has been a qualified assignment shall be made without regard to any provision of such assignment which grants the recipient rights as a creditor greater than those of a general creditor.

(d) Qualified funding asset

For purposes of this section, the term “qualified funding asset” means any annuity contract issued by a company licensed to do business as an insurance company under the laws of any State, or any obligation of the United States, if–
(1) such annuity contract or obligation is used by the assignee to fund periodic payments under any qualified assignment,
(2) the periods of the payments under the annuity contract or obligation are reasonably related to the periodic payments under the qualified assignment, and the amount of any such payment under the contract or obligation does not exceed the periodic payment to which it relates,
(3) such annuity contract or obligation is designated by the taxpayer (in such manner as the Secretary shall by regulations prescribe) as being taken into account under this section with respect to such qualified assignment, and
(4) such annuity contract or obligation is purchased by the taxpayer not more than 60 days before the date of the qualified assignment and not later than 60 days after the date of such assignment.

(Added Pub. L. 97-473, title I, Sec. 101(b)(1), Jan. 14, 1983, 96 Stat. 2605; amended Pub. L. 99-514, title X, Sec. 1002(a), Oct. 22, 1986, 100 Stat. 2388; Pub. L. 100-647, title VI, Sec. 6079(b)(1), Nov. 10, 1988, 102 Stat. 3709; Pub. L. 105-34, title IX, Sec. 962(a), Aug. 5, 1997, 111 Stat. 891.)

Prior Provisions

A prior section 130 was renumbered section 140 of this title.

Amendments

1997–Subsec. (c). Pub. L. 105-34, Sec. 962(a)(1), inserted “, or as compensation under any workmen’s compensation act,” after “(whether by suit or agreement)” in introductory provisions. Subsec. (c)(1). Pub. L. 105-34, Sec. 962(a)(2), inserted “or the workmen’s compensation claim,” after “agreement,”. Subsec. (c)(2)(D). Pub. L. 105-34, Sec. 962(a)(3), substituted “paragraph (1) or (2) of section 104(a)” for “section 104(a)(2)”. 1988–Subsec. (c). Pub. L. 100-647, in par. (2), redesignated subpars. (D) and (E) as (C) and (D), respectively, struck out former subpar. (C) which provided that the assignee does not provide to the recipient of such payments rights against the assignee which are greater than those of a general creditor, and as concluding provisions, inserted at end “The determination for purposes of this chapter of when the recipient is treated as having received any payment with respect to which there has been a qualified assignment shall be made without regard to any provision of such assignment which grants the recipient rights as a creditor greater than those of a general creditor.” 1986–Subsec. (c). Pub. L. 99-514 inserted “(in a case involving physical injury or physical sickness)”.

Effective Date of 1997 Amendment

Section 962(b) of Pub. L. 105-34 provided that: “The amendments made by subsection (a) [amending this section] shall apply to claims under workmen’s compensation acts filed after the date of the enactment of this Act [Aug. 5, 1997].”

Effective Date of 1988 Amendment

Section 6079(b)(2) of Pub. L. 100-647 provided that: “The amendment made by paragraph (1) [amending this section] shall apply to assignments after the date of the enactment of this Act [Nov. 10, 1988].”

Effective Date of 1986 Amendment

Section 1002(b) of Pub. L. 99-514 provided that: “The amendment made by this section [amending this section] shall apply to assignments entered into after December 31, 1986, in taxable years ending after such date.”

Effective Date

Section 101(c) of Pub. L. 97-473 provided that: “The amendments made by this section [enacting this section and amending section 104 of this title] shall apply to taxable years ending after December 31, 1982.”

Section Referred to in Other Sections

This section is referred to in sections 72, 5891 of this title.

From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 7, 2003]
[Document not affected by Public Laws enacted between January 7, 2003 and February 12, 2003]
[CITE: 26USC130]

Link to Source U. S. Government Document