Not all settlements fall under the traditional tax-exempt structure of IRC Section 104(a)(2). For cases involving employment disputes, defamation, wrongful termination, emotional distress, discrimination, and other non-physical injury claims, a Nonqualified Structured Settlement can provide a valuable alternative.
Selling a business or real estate can result in significant capital gains taxes, often reducing the net proceeds available to the seller. A Structured Installment Sale under IRC Section 453 provides a tax-efficient strategy that allows sellers to spread capital gains tax liability over time, instead of paying it all in the year of sale.
For settlement recipients who depend on means-tested government benefits like Medicaid, Supplemental Security Income (SSI), SNAP (food stamps), or housing assistance, receiving a large lump sum from a settlement can jeopardize their eligibility for these critical programs. TLC provides Government Benefit Analysis to help claimants structure settlements to protect their financial security and public assistance eligibility.
When a settlement involves an individual who is Medicare-eligible, federal law requires that a portion of the settlement be set aside to cover future medical expenses that would otherwise be paid by Medicare. Medicare Set-Asides (MSAs) ensure that funds are properly allocated for Medicare-covered treatments, preventing claimants from facing penalties or losing benefits.
For many settlement recipients, a lump sum payment can present challenges related to financial management, tax efficiency, and government benefit preservation. Integrating a trust with a structured settlement can provide a secure and strategic way to protect assets, manage distributions, and ensure long-term financial stability.
At TLC Structured Settlements, we provide strategic settlement planning support tailored to the unique needs of personal injury litigators navigating mediation. As trained and licensed attorneys ourselves, we bring a deep understanding of the legal and financial complexities involved in settlements, enabling us to work seamlessly with attorneys and their clients. Our team delivers critical financial insights, structured settlement options, and benefits guidance—whether in person for select cases or remotely via cutting-edge communication tools—helping to ensure well-informed decisions that support long-term financial security.
