A Non-Physical Structured Settlement (also called Non-Qualified) may be used in many situations where a taxable lump sum will be paid. These taxable dollars, when taken in a lump sum, may create a larger tax burden than if spread out over time. A non-physical structured settlement may defer taxation into the year the income is received for the following types of cases:
- Non-physical injuries
- Long-term disability cases
- Punitive damages
- Discrimination
- Sexual harassment
- Employment litigation
- Environmental claims
- Construction defect claims
In addition to potentially reducing taxes, structuring such cases can also provide tailored, guaranteed payment streams to match individual needs and financial objectives. A structured settlement can benefit all parties to these disputes by reducing risks and costs while saving time and money.
Because each situation is different, it is recommended that you consult with your tax advisor to determine your individual tax implications.
