Maximizing Value and Minimizing Tax: The Versatility of Structured Settlements

Structured settlements are most often associated with large personal injury cases, but they can do much more. From liability and workers' compensation claims to taxable settlements and even real estate or business sales, structured options offer financial and tax advantages for all parties involved.

🔹 Liability Cases

Benefits for claimants:

• Guaranteed, tax-free payments for future needs

• Customized payment schedules (monthly income, lump sums for milestones, etc.)

Benefits for insurers/self-insureds:

• Lower total payout costs

• Creative settlement structures that help resolve claims faster

  
  

🔹 Workers' Compensation Cases

Benefits for injured workers:

• Stable, tax-free income over time

• Helps preserve eligibility for SSDI/Medicaid when paired with professional administration

Benefits for carriers/employers:

• Cost containment and full file closure

• Meets Medicare Set-Aside (MSA) guidelines when required

• Major savings on MSA Settlements

  
  

🔹 Taxable Cases (Non-injury Settlements, Employment Claims, Attorney Fees)

Structured settlements aren't just for tax-free cases, they’re also smart for taxable settlements like:

• Wrongful termination or discrimination claims

• Attorney fee structures to reduce taxes or supplement retirement

• Other employment-related disputes

Why structure these?

• Spreads taxable income over time

• Reduces risk of higher tax brackets in a single year

Creates predictable income for financial planning

🔹 Structured Settlements with Market-Linked Growth

For claimants seeking more upside potential than traditional fixed structures, there are now market-linked structured settlement options that offer growth tied to the S&P 500 — while still providing the core benefits of tax-free income.

Two leading options:

• Prudential Income Advantage

• Pacific Life ILAPA (Index-Linked Annuity Payment Adjustment)

Key Benefits:

• 📊 Growth Potential: Payments can increase based on positive S&P 500 performance (subject to caps/floors).

• 💰 Tax-Free Income: Even growth-based payments remain income tax-free when properly structured in physical injury cases.

• 🛡 Downside Protection: Both options offer a guaranteed baseline — payments won’t go below the original fixed amount, even if the market underperforms.

• 🔁 Long-Term Planning: Ideal for younger claimants or those with long payout timelines who want exposure to market growth without taking on traditional investment risk.

These solutions combine the security of a structured settlement with the potential of the market, creating more dynamic outcomes for the right cases.

🔹 Structured Installment Sales (via MetLife)

Selling property or a business? MetLife’s Structured Installment Sale can help you:

• Spread income over time

• Defer capital gains taxes

• Maintain steady, long-term cash flow

• Reduce total tax burden

  
  

✅ Bottom Line

Structured settlements are flexible tools that go far beyond injury cases. They provide:

• Tax advantages

• Long-term financial security

• Settlement efficiency for all parties

  
  

Have a case or transaction where this could help? Let’s connect — we’re happy to provide quotes, illustrations, or a quick consultation anytime. Call Hathaway Settlements

: 248-715-5250.

Financial Security Unlike Any Other