Non-Qualified Assignments

For many years, structured settlement annuities have been utilized to provide future periodic payments to injured claimants in physical tort cases. Liberty Life and Midwest Trust (in conjunction with Integrated Financial Settlements) have developed a new application for the structured settlement concept, utilizing annuities and U.S. treasuries, for use in resolving certain non-physical injury claims.

In these non-qualified cases, if either the claimant (the person receiving the periodic payments) or the defendant/insurer (the purchaser) owned the annuity contract or U.S. treasuries, certain adverse income tax or accounting consequences may have occurred. As a result, the Non-Qualified Assignment (NQA) was developed to alleviate these undesirable consequences. NQA’s can defer income payments into future years thus avoiding paying potentially higher taxes in the current tax year.

Under a NQA, an assignment company receives financial consideration from the original responsible party and subsequently purchases an annuity or U.S treasuries to fund the assigned future payment obligations. The NQA permits an assignment company to own the annuity or U.S. treasuries in a manner similar to the assignment process used in physical injury cases.

Non-Qualified Assignments can be considered in most any transaction wherein the parties would benefit by receiving future periodic payments instead of or in addition to an up-front cash payment. Among other benefits, NQA’s can offer tax deferral, enhanced rates of return and guaranteed payments for a wide variety of disputes and transactions, such as: 

  • Structured Installment Sales - capital gain deferred on business and property sales*
  • Employment claims
  • Wrongful Termination
  • Gender, Age and Racial Discrimination Cases
  • E&O, D&O and related claims
  • Attorney Fees
  • Construction Defect
  • Environmental Litigation
  • Punitive Damages
  • Sexual Torts
  • Non-Physical Injuries
  • False Arrest/Imprisonment
  • Pre & Post August 5, 1997 Worker’s Comp Claims**
  • Disability Policy Buy-outs*
  • Property Disputes
  • Breach of Contract
  • Lottery/Contest Winners*
  • Fraud Claims
  • Psychological Damage Claims
  • Divorce Settlements

NQA payments can be customized to match the specific requirements of the parties to the transaction. Periodic payments can be guaranteed for a period of years or can be made for the life of the recipient. Lump sum payments can also be arranged to coincide with the future economic needs of the recipient. 


*Not offered by Liberty Life

**Non-Qualified Assignments for post August 5, 1997 claims not available with Liberty Life