How to Preserve Settlement Funds After Constructive Receipt

In an ideal world, every injured claimant would meet with a plaintiff settlement consultant before making any financial decisions. Unfortunately, some claimants accept a lump sum cash settlement, forfeiting tax advantages and long-term financial security in the process. In other instances, defendants or insurers may refuse to structure the settlement proceeds. Fortunately, there are still some options for claimants who have accepted lump sum cash settlements.

What is Constructive Receipt?

In the context of a legal settlement, constructive receipt refers to funds that may not necessarily be in the hands of the claimant or the claimant’s attorney, but which, in a sense, are credited to the individual. In other words, once the settlement agreement is finalized, constructive receipt has occurred. Once that happens, options including traditional structured settlement annuities are off the table.

Post-Constructive Receipt Solutions

Sage’s team works with leading financial firms to offer a range of post-constructive receipt financial vehicles, including:

• Single Premium Immediate Annuity (SPIA): Guaranteed¹ payments can begin immediately or on a future date (age requirement to begin payments may vary by insurer). Some issuers allow one-time withdrawal for financial emergency. No account management or maintenance fees.
• Deferred Income Annuity: Annuitant selects a future date to begin receiving guaranteed² payments (age requirement to begin payments may vary by insurer). No account management or maintenance fees.
• Post-Settlement Managed Account: $250,000 minimum; U.S. Treasuries serve as the underlying investment.
• Post-Settlement Managed Trust: $250,000 minimum; funds are placed in a standalone trust with U.S. Treasuries as the underlying investment.
• Settlement Investment Services: $50,000 minimum; digital advisory platform with professionally managed portfolio; provides educational resources about money management, budgeting, and investing.

Combat Constructive Receipt—Contact Sage Today

Making financial decisions prior to settlement is always the best strategy, but it doesn’t always happen. Whether your client is looking for long-term income preservation or a reliable source of income to hedge against market volatility, we have solutions. Contact your Sage consultant online or by phone at (855) 288-7243 to learn more.