IRS on S&P 500 Linked Structured Settlement:  It Works!

IRS on S&P 500 Linked Structured Settlement: It Works!

September 13, 2014 – Every Friday morning, when the Internal Revenue Service releases its written determinations to the public as required by law, not much fanfare is usually made of the event.

(Insert chirping crickets soundtrack here)

But with the release of Private Letter Ruling 201435006 on August 29, 2014, everyone involved in the resolution of personal, physical injury claims will want to be aware of this particular PLR and understand its implications.

Stock Index Up IconThat’s the date the IRS publicly declared it would accord an S&P 500 linked structured settlement annuity the same tax treatment as traditional, non-indexed structured settlements.

As always PLRs cannot be cited as precedent even though they are commonly viewed as very strong indicators of how Treasury will interpret existing law.

Subscribers to the Finn Financial Group e-newsletter may recall our April 16, 2014 issue which introduced our clients to a then-brand new structured settlement option being marketed by Pacific Life called the . . .

Structured Settlement Indexed Linked Annuity Payment Adjustment Rider

Fulfilling our promise made to readers at the time, the anticipated PLR is now available on the website.  (Just click the link in paragraph two)

Since we laid out the particulars of Pacific Life’s indexed option sufficiently last April, no need to go into the details again here. Just click the orange words above to read our newsletter.

Suffice it to say, though, that an S&P 500 linked structured settlement annuity, while not appropriate for everyone, can certainly fill a void in certain situations.

Case in point:  Several of our clients in their fifties have already benefited from indexed annuities we placed for them using their own personal retirement funds. 

Based on that success, we believe this option has unique advantages to plaintiff attorneys who structure their fees.

So don’t forget to ask for an indexed option next time you reach out for structured settlement illustrations.

Even though we’re certain traditional fixed structured settlements will still dominate the settlement planning landscape, cash flow that might increase in the future may prove too attractive to pass up for many.


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