Structured settlement companies

May 27, 2006, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

A structured settlement company can be a strong asset when you are considering settlement of a large personal injury file.  There are a number of reasons to consider structured settlements but this is particularly true where the injuried party is now suffering from a disability/handicap that makes it difficult to manage finances or the family unit is not capable of managing finances.  In the case of a catastrophically impaired person, whose needs will be high over a long period of time/lifetime, then making sure that the funds will last over that period of time will be essential.  I was provided recently with a Pre-Mediation Checklist from McKellar Structured Settlements that contained some valuable information to consider when looking at a structured settlement for the damages.

The checklist contained the following:

  1. Consult with a structured company.  You may want the consultant to attend the meeting (recommended) and all parties should be notified.
  2. Forward medical information to the structured company.  They will have to determine an impairment rating - used by insurance companies when quoting on the structured settlement plan.
  3. Obtain some preliminary structure proposals and introductory information - this is important as you want to educate your client about structures before the settlement meeting.
  4. Obtain any valuations.  Structured companies are very useful in providing present values for Future Care cost reports, future income loss (Income Replacement Benefits) and Accident Benefits.  The structured company will provide this service at no cost to your client.
  5. Obtain any structured factors.  For example, future income loss is sometimes assessed at a fixed dollar amount per year, such as $15,000.00 per year, and a present value can be assessed for this amount.
  6. Ownership of the structure.  This is an important issue as the insurance company funding the structure may wish to assign ownership of the structure to another company.  There will be an assignment fee and this should be negotiated to ensure that the insurance company will cover the fee for the assignment - usually $2,000.00.
  7. What are the terms of any guarantee.  Consideration has to be given to who the beneficiary will be on the structure.  The injured party will want to have his/her estate named as the beneficiary in the event of death before the term of the structured settlement.  There will be a cost for that and the structured settlement representatives in attendance at the mediation will be able to assist in determining these costs.
  8. Minutes of Settlement to be prepared.  The structured settlement company will assist in making sure that the wording in the settlement documents will satisfy all requirements for the tax free status that payments under the structure enjoy. 
Posted under Personal Injury, Automobile Accident Benefits, Catastrophic Injury, Disability Insurance, Pain and Suffering

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About Deutschmann Law

Deutschmann Law serves South-Western Ontario with offices in Kitchener-Waterloo, Cambridge, Woodstock, Brantford, Stratford and Ayr. The law practice of Robert Deutschmann focuses almost exclusively in personal injury and disability insurance matters. For more information, please visit www.deutschmannlaw.com or call us toll-free at 1-866-414-4878.

The opinions expressed here, while intended to provide useful information, should not be interpreted as legal recommendations or advice.

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