FAQ

Are structured settlements limited to physical injury cases?

No. They can be used for non-physical injury cases and include areas such as property damage, employment, wrongful mortgage foreclosure, punitive damages, disability claims, workers' compensation, disability, LSHWA and lottery prizes.

Do I get interest on structured settlements?

Yes. The structured settlement is set up as an annuity with an insurance company. The investment in the annuity earns interest tax-free in physical injury cases. In all other cases, taxes are deferred. Interest accrues on the full amount, and taxes are only paid on the periodic payments.

Why are structured settlements tax-free in physical injury cases?

IRS codes specify that structured settlement awards are not taxable because the amount and time of each payment is fixed, and because payments are issued by a qualified funding asset, that is, an annuity from a licensed insurance company. See IRS Code 130 and IRS Code 104(a).

Is my money safe in an insurance company?

Creative Capital only works with highly rated companies, some of which have been in business since before the Civil War and have never missed a payment to annuitants and policyholders–even during the Great Depression. In addition, New York tightly regulates the insurance industry to protect policyholders. Large settlement sums may also be divided among different companies to further reduce risk.

What about the effects of long-term inflation?

Historically, inflation has been cyclical. Even periods of high inflation, such as the late 1970s and early 1980s, have been followed by periods of low inflation. Simply put, the long-term nature of a structured settlement, with its tax-free, fixed rate of return, tends to smooth out inflationary bumps.

Is it ever too late to create a structured settlement?

Yes, timing is critical. It must be done at the time of settlement—before plaintiffs receive their money. The structured settlement is created at the same time as closing papers, and it must include language that protects plaintiffs' tax-free or tax-deferred benefits.

Can I use a structured settlement as collateral for a loan?

Generally, no, Structured settlements are made to protect you from abuse; using a structured settlement as collateral for a loan would void that intended purpose.

What is a Qualified Assignment?

This is a situation in which the defendant assigns ownership of the funding assets, along with the liability to make future payments, to a Qualified Assignee (typically an insurance company). The defendant thus transfers payment requirements to this assignee.

Why Creative Capital?

Keith Kleinick works exclusively with structured settlement firm Creative Capital, a firm chosen by attorneys for important reasons:

• Led by a former trial attorney, Creative Capital is the only structured settlement firm created by and for attorneys.
• Creative was the first structured settlement firm to create a CORA (Certificate of Reliability and Assurances) affidavit.
• CORA guarantees the best available rate of return, with no steering fees or kickbacks.
• Creative selects only the best insurance companies in which to invest your funds.
• The result is guaranteed financial security and reliable asset growth, along with long-term tax savings.

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