Structured Settlements & Assignment Companies: A Seamless Process
An assignment company must be involved when a claimant or a plaintiff attorney wants to utilize a structured settlement.
United States tax laws declare that settlement funds to be structured cannot be “constructively received,” meaning the defendant cannot pay the attorney, law firm, or claimant directly. Instead, the defendant issues the funds to an independent, third-party assignment company. The assignment company is directed to purchase the structured settlement. The structured settlement provider then makes the agreed-upon payments to the claimant or attorney.
Rather than using an annuity as the underlying investment, a market-based structured settlement uses an investment portfolio managed by a reputable financial institution. Alternatively, the claimant or attorney can choose to have their own financial advisor manage the portfolio. Depending on the type of settlement, the structured settlement payments will be income tax-free or income tax-deferred.
The Structured Settlement Process
Why is United Assignments based in Barbados?
The United States has a favorable tax treaty with Barbados that prevents double taxation on specific funding instruments, including structured settlements. Upon receipt of the funds from the defendant, United Assignments immediately wires the money to a United States-domiciled financial institution. All funds remain in the United States for the entirety of the market-based structured settlement contract.
United Assignments is subject to strict Barbadian legal and regulatory authority and holds a local Barbados Tax ID and a United States Tax ID Number. The company is overseen by an experienced Board of Directors and Management team.
