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What is a tax free structured settlement?

April 26, 2017Free structured tax

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What is a tax free structured settlement?

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A tax free structured settlement is an alternative to a lump sum settlement in a suit for damages for physical injury, physical sickness, and wrongful death. The defendant, or its casualty company, agrees to pay the plaintiff payments over a period of time. The future obligation is funded by the purchase of a settlement annuity from a life insurance company or United States Government Bonds. Both Annuities and Treasury Bonds are the only permissible “Qualified Funding Assets” in structured settlement cases pursuant to I.R.C. Section 130(d).