Structured Settlements for Taxable Damages

Solution

As a claimant in a legal dispute, you can defer the receipt and taxation of taxable damages awarded in a settlement. Favorable tax case law allows you to time the payment of taxable settlement proceeds and their taxation if you operate within an established framework.

DAC provides the framework upon which you and your trusted tax and financial advisors can build a long-term financial plan for your taxable settlement proceeds to reduce your annual tax burden and provide greater control over the timing of the receipt of your legal fee income.

Key Benefits

There are no maximum limits on amounts you can defer and no age-related restrictions on when deferred settlement proceeds can be paid.
Your settlement proceeds are invested on a pre-tax, tax-deferred basis.
You can choose among flexible investment options to fund payment.
Payments are made to you under an agreed periodic payment plan, with taxes due in the year in which you receive payments.

Investment Options

DAC offers the following investment options.

Same as legal fee deferral.

Customized Investment Portfolio

You can defer settlement proceeds of $2 million or more to be invested directly in a customized portfolio of investments. The payments generated wholly depend on the investment portfolio performance. You can choose the investment manager and can set portfolio-level investment objectives and risk parameters.

PPVA

You can defer settlement proceeds of $1 million or more to be invested in a private placement variable annuity (PPVA) contract which wraps an underlying customized portfolio of investments. A PPVA contract can be issued by a U.S. or non-U.S. life insurance company. The payments generated wholly depend on the performance of the investment portfolio underlying the contract. You can choose the investment manager and can set portfolio-level investment objectives and risk parameters. A PPVA contract may marginally outperform a directly invested portfolio if the chosen investment strategy regularly generates significant (4% or more of the total portfolio annually) amounts of U.S. stock dividend income.

Fixed Indexed Annuity

You can defer settlement proceeds of $50,000 or more to be invested in a fixed indexed annuity contract issued by a U.S. life insurance company. The payments generated combine features of fixed (guaranteed) and variable (based on a stock market index) annuity contracts. Fixed indexed annuity contracts often provide complete downside protection in the form of a 100% return of principal guarantee.

Solution

Investment Options

Other solutions offered by the DAC provides assignment company;