Why low interest rates aren’t killing structured settlements



Attorney Dennis Beaver’s syndicated “You & The Law” column is more than an engaging and enjoyable read. It is, to paraphrase George Will, an ongoing testimonial challenging the law’s unsleeping solicitousness for the strong.

This morning, Kiplinger posted Beaver’s latest column, “Low Interest Rates Don’t Make Structured Settlements a Bad Deal” in which he quotes an insightful structured settlement commentator:

I ran Theo’s question by Peter Arnold, who has been in the structured settlement field for more than 20 years and was formerly deputy director of the National Structured Settlements Trade Association.

“The federal tax code gives two important benefits to accident survivors who agree to have some or all of their settlement placed into a structured settlement annuity,” Arnold explains. “First, 100% of that income is tax free. You won’t pay any federal, state or local income taxes, no interest or dividend taxes, and no alternative minimum tax.”

“Second, you get guaranteed payments to match future needs — things like wheelchair replacement, therapy or future surgery. That relieves accident survivors from the stress of making appropriate investments with settlement funds.”

Financial strategies for accident victims with ongoing medical and rehabilitative expenses are fundamentally different from strategies for those without these needs. People with medical and rehabilitative needs typically have expenses relating to their accident that cannot be delayed. Money must be available at precise times, come Hell or high water. That’s where a structured settlement can have a crucial role as part of an overall post-accident financial strategy.

For Dennis’ full column on structured settlements, click here.