Market-Based Structured Settlements for Claimants and Attorneys

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Market-based structured settlements are precisely what their name implies: a structured settlement where funds are invested in the stock market. Market-based structured settlements are an option for clients’ recoveries and attorneys interested in deferring income and tax.

How Do Market-Based Structured Settlements Work?

Like a traditional structured settlement, a market-based structured settlement requires that the settlement agreement and release includes a carve-out of the funds to be structured. The defendant or insurer will pay the designated amount to be structured to a third-party assignment company, which then directs a master custodian to invest the assets and make future scheduled payments. The investment policy and timing of payments are part of the contract.

This vehicle is available for clients and attorneys who wish to defer their fees. Attorneys tend to prefer market-based structured settlements because they allow the attorney to use their own investment advisor to hold and manage funds. The funds can dovetail their overall investment strategy.

What are the benefits of a market-based structured settlement?

There are many benefits, including:

  • Income tax-free payments (including interest) for physical injury cases
  • Income tax-deferred payments (including interest) for non-physical injury cases and attorney fees
  • Customized distribution schedules
  • Multiple funding options
  • Ability to use personal financial advisor to manage funds

The importance of tax savings cannot be understated. A market-based structured settlement either eliminates income taxes for injured claimants or defers (and potentially decreases) liability for plaintiff attorneys.

What type of growth can I expect with a market-based structured settlement?

The annual rate of return depends on the chosen investments. Here are hypothetical1 return scenarios, depending on the investor's risk tolerance.


Claimants and attorneys who want guaranteed2 income may consider a hybrid approach and place some of their funds in a traditional structured settlement annuity (bonus: favorable structured settlement annuity rates are currently holding steady!)

Contact Sage for Market-Based Structured Settlements

A market-based structured settlement provides a tax-advantaged approach to earning market-related returns. Contact your Sage consultant today for more information about growing your attorney fees or settlement funds.

1 Scenarios are based on historical performance and are intended for illustrative purposes only. Please contact your Sage consultant to request an illustration.

2 Guarantees are subject to the claims-paying abilities of the issuing insurance company.