Structured Settlements and Single-Claimant Qualified Settlement Funds
In 1982 Congress legislated a tax exclusion incentivizing the use of structured settlements. Since then the structured settlement has become a common conclusion for personal injury claims. This article tracks the history and evolution of the structured settlement industry, including the beginning and continuation of the factoring industry. The history, specifically the evolving treatment of the economic benefit and constructive receipt doctrines as applied to structured settlements, informs the debate over whether damages paid to single-claimant qualified settlement funds should or should not be eligible for the structured settlement tax exclusion. The article concludes that eligibility is consistent with structured settlement history, and in the interest of public policy.
This article first appeared in the NYU Journal of Legislation & Public Policy.