Skip to main content

Title IX Cases and Structured Settlements


Perhaps given possible changes in federal enforcement of Title IX and the Clery Act under the Trump Administration we have been seeing a lot of activity in these types of cases.  Title IX of the Education Amendments of 1972 protects people from discrimination based on sex in education programs or activities which receive federal financial assistance.

 Many of these cases involve minors so the use of Structured Settlements is often discussed and used to settle these cases.

 We find that even in the cases of sexual abuse cases that many attorneys are not aware that most of these cases are "non-qualified" type cases.  This means that most of them do not qualify under Internal Revenue Code (IRC) 104(a)(2), which makes the interest accrued in structured settlements income tax free in the case of physical injury damages.  If there were physical injuries as well then the entire structured settlement, including interest would be income tax free.  However, this is a VERY gray area and must be handled carefully.  Make sure your settlement agreements contain language which clearly states that damages are being awarded as a result of physical sickness or injuries if this is the case.

 Even if your Title IX or other non-physical injury case does not involve any physical injuries you may still wish to consider a non-qualified structured settlement due to many advantages over a lump sum settlement such as:

  • Maximize Settlements and Minimize Taxes. Non-qualified structured settlements can defer the receipt of income into future years, potentially minimize exposure to AMT and avoid paying higher taxes in the current tax year. Tax issues can be very important in designing a financial resolution that satisfies all parties involved.
  • Save time and money. A structured settlement may eliminate the cost of ongoing litigation and claims expense by moving negotiations forward that have otherwise deadlocked. A negotiated settlement reduces the risk of large jury‐awarded damages

  • Transfer risk and reduce costs. A Non-qualified structured settlement can eliminate the risk of changes in investments or interest rates
  • Increased flexibility. The payment stream to the claimant can be designed to meet a variety of needs, including lump sums, immediate payments, deferrals, or some other combination.
If you have any questions or if we can assist you in any way please do not hesitate to contact us at (734) 433-1670 or cyril@whitehousellc.com

Comments

Post a Comment

Popular posts from this blog

COVID will not stop us providing unique settlement solutions using structured settlement annuities!

I hope that you are doing well! We just FINALLY completed the settlement of a case for a minor (age 17) that we were initially engaged by our plaintiff attorney client in February 2021, to provide structured settlement annuity quotes! Although the claimant was very close to the age of majority the key to the case was not giving him all of the settlement proceeds, which was over $120,000, at age 18. Having been in this business for over 20 years I cannot tell you the number of sad cases we have witnessed where the young claimant receives their settlement proceeds at age 18 only to blow through all the funds before anyone can blink and make bad decisions with the proceeds! This case involved two liability insurance carriers Liberty Mutual and Member Select. We coordinated multiple rounds of document revisions and had to have a separate set of different documents for each insurance carrier. In addition, one of the carriers would not fund the annuity until we had a fully executed court ord...
Post a Comment
Read more

Using a structured settlement annuity pre-suit

 We recently were engaged by the Guardian Ad Litem (GAL) in the case of an 11 year old boy who was struck by a care while riding his bike.  The father of the boy settled the case directly with the liability auto insurance carrier pre-suit and the GAL contacted us to ensure that the boy's settlement funds were handled appropriately. The case settled for a total of $65,000 and $59,000 was being allocated to the structured settlement annuity for the boy as follows: $5,000 paid immediately upon settlement $10,000 at age 18 $20,000 at age 21 $25,000 at age 25 $35,718 at age 30 this is total benefits of $95,718! The annuity was placed with a large life insurance company rated A+ by the A.M. Best rating agency and provided the family and GAL with the peace of mind that the young man would not receive the entire amount at age 18. In addition, due to the use of the structured settlement annuity, all of the interest gained during the payout period ($31,718 to be exact) is INCOME TAX FRE...
Post a Comment
Read more

SECURE ACT 2.0 New Retirement Rules Workshop

 The SECURE Act is by far the biggest retirement-oriented legislation to be enacted in over a decade. Many Americans are left wondering, “What does this mean for me?” Here’s what you need to know. If you have any questions or if I can do anything for you please do not hesitate to email me at cyril.white@fourfinancial.com or call me at (734) 272-4322! I recently did three webinar workshops covering the SECURE Act and what it means for our clients.  Click on the video link below to watch the full webinar workshop! The SECURE Act, passed in late 2019, is by far the biggest retirement-oriented legislation to be enacted in over a decade. The new law is a very good thing for some retirees and not such a good thing for others. Barely half of the workforce is covered by a retirement savings plan through their employer, and the SECURE Act is meant to address this issue, among other things. Here are some key provisions in the Act that may affect your retirement plans. 1. Required minimu...
Post a Comment
Read more