Using Structured Settlements in Divorce
Using Structured Settlement Annuities in divorce negotiations is not the same as purchasing traditional annuities.
Often times, in divorces, the need arises for a spouse to have income for a period of time or in lump sums for anticipated needs. However, these income needs are limited by design and often clouded by relying on a "promise to pay" by an ex-spouse who can die, become disabled, lose a job or business, or move away with a new spouse. In addition the "ex" may not want to continue contact and a long obligation to someone they want "rid of", nor do they want a lien on assets.
Read more: Using Structured Settlements in Divorce
Application of the Special Needs Trust in Personal Injury Cases for Disabled Individuals Under Age 65
Of the many obstacles that may hinder settling a personal injury suit, and certainly a potential area of professional negligence, is the loss of entitlement benefits SSI, Medicaid, AFDC, etc) following a settlement. This occurs if the recipient obtains assets and/or income that exceed the statutory qualification thresholds (usually $2000). In the exceptional case where the award is significantly greater than the lifetime value of the entitlement benefits, the loss of those benefits may be of little consequence. However, in many settlements, benefit termination economically disadvantages the injured party and may produce a worse financial situation than prior to settlement. Under this scenario, the injured party must first exhaust the awarded funds before reapplying for entitlement benefits. During that period of time, they have no income and risk tougher scrutiny as they attempt to re-qualify for benefits.
The Advantages To Funding Trusts with Structured Settlement Annuities
Too often we see a conflict in deciding whether to use a structured settlement annuity or an investment account to fund a trust for the settlement proceeds of a claimant, and we overlook finding the best means of satisfying the needs of the claimant. Quite often this can be accomplished by using a combination of the two to produce the liquidity and lifetime benefits needed.