What are some of the common mistakes found in documents?
The most common mistake is the lack of understanding by the drafter in what is happening. Under no circumstances should it be stated that the plaintiff or claimant is going to purchase an annuity. That is for the defendant, its liability insurer or the assignee. A variation of that error has the cost of the annuity shown as consideration being paid to the releasor (plaintiff). It is the future payments on the dates specified that comprises the consideration, along with any cash lump sum at the time of settlement. The annuity cost may be shown elsewhere in the settlement agreement, such as in the section permitting the qualified assignment, but should not be shown as consideration to the releasor. The annuity cost is really the consideration being paid by the releasee to the third-party assignee for assuming the future payment obligation. Archaic language reflecting vestiges of superseded tax law is another. For example, the recitation as the the reason for the damage payments should in
