Bankruptcy and Settlement Planning
Another benefit of Structured Settlements for some injury claimants is the fact that they are traditionally exempt from creditors, judgements, and bankruptcy.
Traditional personal injury structured settlements and the annuities that fund them are exempt from creditors, judgments, and bankruptcy.
This is possible because the injury victim/claimant is not the owner of the annuity contract; therefore, shielded from bankruptcy, creditors, and judegements.
Using Structured Settlements To Protect Your Assets
There is another strategy in settlement planning, that is applied to situations in which an individual (usually not a personal injury claimant) is contemplating a potential or actual bankruptcy.
The strategy involves shifting assets into financial vehicles that are exempt, under state law, from bankruptcy creditors. Some states (e.g. Florida) have homestead laws that exempt the principal residence. Most other states exempt cash values in life insurance and/or annuity contracts.
Some high-risk professions (especially doctors, but also lawyers, architects and builders) that have high probability of professional negligence claims that could exceed the limits of available insurance, engage in this type of planning (way in advance of a potential occurrence) as a means to shelter assets.
Care should be taken if contemplating this type of pre-event planning, and a LEGAL EXPERT consulted, to insure that all state laws are observed.
Our area of expertise is in providing the various annuity and life insurance contracts, once all legal requirements have been satisfied.
Settlement Professionals does not endorse or engage in this type of planning for individuals already in a bankruptcy proceeding, or within the “look-back” period immediately preceding a bankruptcy filing.
If you would like to discuss ways that Structured Settlements can help add an additional barrier of protection for you or your client against bankruptcy, creditors, and judgements don’t hesitate to contact us anytime.
Contact me to discuss this approach.
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