SETTLEMENT ADVISORS’ FINANCIAL EXPERTISE
Settlement Advisors has the expertise and software to make detailed projections of the potential saving from receiving settlement payments over time, taking into account a claimant’s specific financial circumstances such as other income, assets and deductions. Our illustrations show the estimated dollar savings and the rate of return thereby providing a basis for a claimant to make an educated financial decision.
EXAMPLES OF TAXABLE SETTLEMENTS
The most common types of taxable settlements result from employment situations such as wrongful termination, sexual harassment, age and sex discrimination and similar situations. Whistle blower payments and other forms of taxable financial settlements can also be structured so that the payments are received over time.
Employment Settlement Example
Consider an example involving a $1 million settlement in a sexual harassment case for a single, 30 year-old Illinois resident. Assume that she will continue to work after the settlement, earning a salary in the mid $30,000 range which will increase modestly each year. If she receives $500,000 in the first year ($100,000 in cash and $400,000 for fees and expenses) and an annuity is purchased to spread th remaining $500,000 over the following 5 years, our calculations show that she will end up with an additional $110,000 in cash and a return on the $500,000 investment of 13%. There are many other assumptions included in the analysis which we would be happy to share with you, or it may be more helpful to prepare an individual detailed illustration for a specific situation.
Taxable Settlements Where Fees are not Deductible
In some situations, such as punitive damages, attorney fees and expenses are not deductible for tax purposes. Payments of punitive damages should be structured, if at all possible. Structuring half of a million dollars of punitive damages can save well over $130,000 over 5 years and produce a rate of return of over 20%.
Structuring taxable settlements can make excellent financial sense, and Settlement Advisors has the expertise to illustrate the potential saving and allow the claimant to make an informed decision.
