The use of structured settlement annuities for employment related claims has ... Employment related damages and non-physical injuries are fully taxable in the ...
Structured Settlements EMPLOYMENT RELATED CLAIMS
Extraordinary Needs Require Extraordinary Solutions: An Innovative Way to Settle Employment Claims
The use of structured settlement annuities for employment related claims has gained acceptance as a valuable settlement tool. Employment case litigators and their clients continue to praise this unique approach to creating better settlements based on a structured settlement’s inherent qualities of offering tax advantages, safety, security, and reliability. Millennium Settlement Consulting®, the nation’s leading provider of structured settlements for plaintiffs, works with clients to help secure their financial future by creating a comprehensive plan designed to meet their customized needs. Our settlement consultants help ensure a greater long-term value of any settlement. We match clients’ current and future needs with guaranteed benefit streams that are flexible, tax-efficient, and reliable.
DEFER TAXES RECEIVE COMPETITIVE RATES OF RETURN LESSEN THE TAX BURDEN
Maximize Your Settlement With a Structure Employment related damages and non-physical injuries are fully taxable in the year the settlement is received. When receiving the settlement as a single lump sum, precious dollars are lost to taxes that could have otherwise been deferred and leveraged for future growth. Simply settling for cash does not yield as much money as a structured settlement annuity.
Employment Settlement as a Lump Sum Cash Settlement vs. Structured Settlement Lump Sum
Net Settlement Amount
$1,000,000 - 400,000 ____________ $ 600,000
$1,000,000 - 400,000 ____________ $ 600,000
Taxes Paid in Year 1 (35% federal, 6% state*)
- 246,000 ____________
Net to invest in Year 1
Settlement Attorney Fees & Expenses
By choosing a structured settlement, the claimant will pay taxes on future periodic payments. This tax deferral strategy will greatly enhance the taxable *Varies by state
With periodic payments from a structured settlement, the plaintiff is able to defer taxation on the entire amount and allow 100% of the funds to be invested. In the example above, the structured settlement gives the plaintiff $246,000 more to invest than settling for cash. IRS REQUIRED TAX DISCLOSURE: Information contained herein is not intended or written to be used, and cannot be used, for the purpose of avoiding any tax penalties. This document is written to support the promotion or marketing of the transactions or matters discussed. You should seek advice based on your particular circumstances from an independent tax advisor.
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Structured Settlements www.MillenniumSettlements.com
EMPLOYMENT RELATED CLAIMS
Settlements for Employment Related Claims Benefits of Structured Settlements: Payments are made by highly rated, well capitalized life insurance companies offering safety and security, as well as professional financial management By utilizing a periodic payment arrangement, deferring settlement dollars over a period of time results in less money being lost to taxes Application of the Alternative Minimum Tax may be avoided since payments are spread over time, lessening the effective tax bracket of the taxpayer Payments are tailored to the claimant’s specific needs; they can be made over a fixed period of time or for a lifetime. Lump sum payments can even be made in the future to correlate with important events
The Problem with receiving a lump sum settlement for an employment suit—TAXES A taxable employment suit can lead to quick dissipation of the settlement: The entire amount of the settlement is taxable in the year of receipt Settlement proceeds can be invested only on an after-tax basis Poor management of the funds can lead to the quick depletion of the entire settlement
Attorneys are also eligible to defer recognition of income through an attorney fee structure
The Solution— You can structure: All types of employment cases Attorney fees Other negotiated workplace settlements
Who is eligible to settle an employment claim using a periodic payment settlement? Self-insured corporations Municipalities
STRUCTURED SETTLEMENT A structured or periodic payment plan via an annuity can result in substantial tax savings and effective financial management of the settlement proceeds. Comparing a professionally managed periodic payment arrangement that is a pre-tax investment with a lump sum settlement illustrates the power of this solution: Earn interest on the principal pre-tax investment Custom designed payment streams Highly competitive rates of return
Payments 100% guaranteed by a life insurance company
Excellent planning tool Ensure your future income needs
For more information on how Millennium Settlement Consulting® can protect and maximize your clients’ recoveries through the use of structured settlements, contact your structured settlement consultant today.