STRUCTURED SETTLEMENT VS. LUMP SUM ANALYSIS WORKSHEET

CASE INFORMATION

Case Caption: [________________________________]

Claimant Name: [________________________________]

Date of Birth: [__/__/____]

Age: [____]

Case Number: [________________________________]

Settlement Amount Being Analyzed: $[________________________________]

Prepared By: [________________________________]

Date Prepared: [__/__/____]

PART I: CLAIMANT PROFILE

A. Personal Information

Marital Status: ☐ Single ☐ Married ☐ Divorced ☐ Widowed

Dependents:

B. Health and Life Expectancy

Current Health Status: ☐ Excellent ☐ Good ☐ Fair ☐ Poor

Injuries from Incident:
[________________________________]
[________________________________]

Life Expectancy:
☐ Normal: [____] years
☐ Reduced due to injury: [____] years
☐ Rated age available for annuity: ☐ Yes ☐ No

Ongoing Medical Needs:
☐ None expected
☐ Periodic treatment
☐ Ongoing care required
☐ Permanent disability/chronic condition

C. Employment and Income

Current Employment Status:
☐ Employed Full-Time (Income: $[____]/year)
☐ Employed Part-Time (Income: $[____]/year)
☐ Self-Employed (Income: $[____]/year)
☐ Unemployed
☐ Disabled/Unable to Work
☐ Retired

Future Employment Capacity:
☐ Expected to return to work
☐ Reduced capacity
☐ Unable to work due to injury
☐ Retirement expected in [____] years

D. Financial Profile

Current Assets:
| Asset Type | Value |
|------------|-------|
| Savings/Checking | $[____] |
| Investments | $[____] |
| Retirement Accounts | $[____] |
| Real Estate Equity | $[____] |
| Other | $[____] |
| Total Assets | $[____] |

Current Debts:
| Debt Type | Balance |
|-----------|---------|
| Mortgage | $[____] |
| Credit Cards | $[____] |
| Medical Bills | $[____] |
| Student Loans | $[____] |
| Other | $[____] |
| Total Debts | $[____] |

Monthly Budget:
| Category | Amount |
|----------|--------|
| Housing | $[____] |
| Utilities | $[____] |
| Food | $[____] |
| Transportation | $[____] |
| Healthcare | $[____] |
| Insurance | $[____] |
| Other | $[____] |
| Total Monthly Needs | $[____] |

E. Financial Management Experience

Investment Experience:
☐ None/Limited
☐ Moderate
☐ Experienced

History of Financial Difficulties:
☐ No history
☐ Past bankruptcy
☐ Foreclosure/Repossession
☐ Credit problems
☐ Susceptible to pressure from others

Financial Advisor Relationship:
☐ Has professional advisor
☐ No advisor
☐ Willing to engage advisor

PART II: SETTLEMENT OPTIONS ANALYSIS

A. Option 1: Full Lump Sum

Gross Settlement: $[________________________________]

Deductions:

Net Lump Sum to Claimant: $[________________________________]

B. Option 2: Full Structured Settlement

Amount Available for Structure: $[________________________________]
(After attorney fees, costs, and liens)

Structured Settlement Quote:

Annuity Company: [________________________________]

Quote Date: [__/__/____]

Quote Number: [________________________________]

Payment Options:

☐ Option A: Monthly Payments for Life
- Monthly Amount: $[____]
- Guaranteed Period: [____] years
- Total Guaranteed: $[____]
- Cost: $[____]

☐ Option B: Monthly Payments for Term Certain
- Monthly Amount: $[____]
- Term: [____] years
- Total Payout: $[____]
- Cost: $[____]

☐ Option C: Lump Sums at Future Dates
- Payment Schedule:

• Total Future Lump Sums: $[____]
• Cost: $[____]

☐ Option D: Combination (Monthly + Lump Sums)
- Monthly Amount: $[____]
- Guaranteed Period: [____] years
- Plus Future Lump Sums: (see schedule above)
- Total Guaranteed Payout: $[____]
- Cost: $[____]

C. Option 3: Hybrid (Partial Lump Sum + Structure)

Immediate Needs Lump Sum: $[________________________________]

For:
☐ Debt payoff
☐ Home purchase/modification
☐ Vehicle purchase
☐ Medical equipment
☐ Emergency reserve
☐ Other: [________________________________]

Remaining Amount for Structure: $[________________________________]

Structured Portion Details:
[________________________________]
[________________________________]

PART III: TAX ANALYSIS

A. Tax Treatment of Personal Injury Settlements

Qualifying Damages (Tax-Free under IRC § 104(a)(2)):
☐ Compensatory damages for physical injury/sickness
☐ Emotional distress damages arising from physical injury

Taxable Amounts:
☐ Punitive damages
☐ Interest (pre-judgment and post-judgment)
☐ Emotional distress not from physical injury
☐ Lost wages (in some jurisdictions)

Settlement Characterization:
| Component | Amount | Tax Treatment |
|-----------|--------|---------------|
| Compensatory (Physical Injury) | $[____] | Tax-Free |
| Punitive Damages | $[____] | Taxable |
| Interest | $[____] | Taxable |
| Other: [____] | $[____] | [____] |

B. Lump Sum Tax Implications

Tax-Free Portion: $[____]

Taxable Portion: $[____]

If Invested (Lump Sum):
- Assumed Annual Return: [____]%
- Annual Investment Income: $[____]
- Federal Tax Rate: [____]%
- State Tax Rate: [____]%
- Annual Tax on Investment Income: $[____]

C. Structured Settlement Tax Advantages

IRC § 104(a)(2) Benefits:
- All payments from qualifying structured settlement are tax-free
- Investment growth inside annuity is tax-free
- No tax on periodic payments

Tax Savings Over [____] Years:

Tax Advantage of Structure: $[________________________________]

PART IV: FINANCIAL COMPARISON

A. Present Value Analysis

Discount Rate Used: [____]%

(Represents opportunity cost - what claimant could earn investing lump sum)

Present Value of Structured Settlement Payments:

Total Present Value of Structure: $[________________________________]

Present Value Comparison:
- Net Lump Sum: $[____]
- Present Value of Structure: $[____]
- Difference: $[____] ☐ Favor Lump ☐ Favor Structure

B. Future Value Analysis

Assumptions:
- Investment Return (Lump Sum): [____]%
- Time Horizon: [____] years
- Tax Rate on Investment Income: [____]%

Lump Sum Growth:

Structured Settlement Total Payout:

C. Internal Rate of Return (IRR)

Structure Cost: $[____]

Total Guaranteed Payments: $[____]

Effective IRR of Structure: [____]%

Comparison to Market Rates:
- Current 10-Year Treasury: [____]%
- High-Grade Corporate Bonds: [____]%
- S&P 500 Historical Average: ~10%

Structure IRR vs. Safe Alternatives: ☐ Competitive ☐ Below Market

PART V: QUALITATIVE FACTORS

A. Arguments for Structured Settlement

B. Arguments for Lump Sum

C. Risk Assessment

Structured Settlement Risks:
☐ Annuity company insolvency (rating: [____])
☐ Inflation eroding purchasing power
☐ Inability to access funds for emergencies
☐ Loss of investment control
☐ Rated age miscalculation (if applicable)

Lump Sum Risks:
☐ Overspending/fund depletion
☐ Poor investment decisions
☐ Market volatility
☐ Pressure from family/friends
☐ Scams and predatory practices
☐ Tax on investment income

PART VI: SPECIAL CONSIDERATIONS

A. Minor Claimant

Claimant is a Minor: ☐ Yes ☐ No

Current Age: [____]

Age of Majority in State: [____]

Structure Options for Minor:
☐ Payments begin at age 18
☐ Payments begin at age 21
☐ Payments begin at age 25
☐ Graduated payments as child ages
☐ Education funding payments

Court Approval Required: ☐ Yes ☐ No

B. Disabled Claimant/Special Needs

Claimant Receives Government Benefits:
☐ SSI
☐ SSDI
☐ Medicaid
☐ Medicare
☐ Other: [____]

Special Needs Trust Recommended: ☐ Yes ☐ No

Structure Can Fund SNT: ☐ Yes (payments to trust) ☐ N/A

C. Medicare Set-Aside Coordination

MSA Required: ☐ Yes ☐ No

MSA Amount: $[____]

MSA Funding Options:
☐ Lump sum MSA
☐ Structured MSA with periodic payments
☐ Rated age annuity for MSA

D. Liens and Deductions

Timing of Lien Payments:
☐ Paid from initial lump sum before structure
☐ Liens reduce structure principal

Attorney Fee Calculation:
☐ Based on gross settlement
☐ Based on present value of structure
☐ Based on cost of annuity

PART VII: ANNUITY COMPANY EVALUATION

A. Proposed Annuity Issuer

Company Name: [________________________________]

A.M. Best Rating: [____]

S&P Rating: [____]

Moody's Rating: [____]

State Guaranty Association Coverage: $[____] per life

B. Rating Evaluation

Minimum Acceptable Rating: A- or better

Company Meets Standard: ☐ Yes ☐ No

Consider Alternative Issuer: ☐ Yes ☐ No

PART VIII: RECOMMENDATION AND DECISION

A. Analysis Summary

B. Recommended Option

☐ Full Lump Sum
☐ Full Structured Settlement
☐ Hybrid Approach

Recommended Structure (if applicable):
[________________________________]
[________________________________]
[________________________________]

Rationale:
[________________________________]
[________________________________]
[________________________________]

C. Claimant Decision

Option Selected: [________________________________]

Client understands:
☐ Tax implications of each option
☐ Present value vs. total payout differences
☐ Liquidity/access limitations of structure
☐ Risks of lump sum management
☐ Annuity company ratings and guaranty limits
☐ Structure payments cannot be changed after funding

PART IX: CLIENT ACKNOWLEDGMENT

I, [________________________________], have reviewed this Structured Settlement Analysis Worksheet. I understand the differences between receiving my settlement as a lump sum versus a structured settlement.

I have been advised to consult with:
☐ Tax professional
☐ Financial advisor
☐ My attorney

I have had the opportunity to ask questions about:
☐ Tax consequences
☐ Present value calculations
☐ Annuity company ratings
☐ My personal financial situation
☐ Long-term implications of my choice

My Decision: ☐ Lump Sum ☐ Structured Settlement ☐ Hybrid

Client Signature: _________________________________ Date: [__/__/____]

Client Printed Name: [________________________________]

Witness/Attorney Signature: _________________________________ Date: [__/__/____]

SOURCES AND REFERENCES

• Internal Revenue Code §§ 104(a)(2), 130, 468B
• National Structured Settlement Trade Association (NSSTA)
• MetLife 2025 Personal Injury Settlement Study
• State Structured Settlement Protection Acts
• Annuity company rating agencies (A.M. Best, S&P, Moody's)
• State guaranty association coverage limits

This worksheet is for analysis and comparison purposes. Structured settlement decisions are significant and often irrevocable. Claimants should consult with qualified tax, financial, and legal professionals before making final decisions.