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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Legal
Satisfied Customers: 36753
Experience:  Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.
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When investing in a structured settlement annuity with tax..

Customer Question

When investing in a structured settlement annuity with tax free benefits through an attorney is there anything I should look out for ? Should I consider hiring a Cpa

Submitted: 1 year ago.
Category: Legal
Expert:  Dimitry K., Esq. replied 1 year ago.
Thank you for your question. Please permit me to assist you with your concerns. Prior to law I was NASD/FINRA licensed and specialized in annuities and life insurance investments.

What type of a structured settlement is this? Is this a judgment, a governmental bond, why is it specifically deemed to be 'tax free'?
Customer: replied 1 year ago.

Thanks for the response ! From what Im told from my attorney and from reading from the firms website, investing with this firm would give me tax free benefits.My case recently was settled by both parties and it involves damages,injury compensation

Expert:  Dimitry K., Esq. replied 1 year ago.
Thank you for your follow-up, Floyd. I appreciate the clarification.

Now I understand, this is your award benefit. Is it listed anywhere in the settlement agreement that it is going to be tax-free?
Customer: replied 1 year ago.

My lawyer hasnt showed me a settlement agreement,All Ive seen and signed is a release on the settlement amount. Is this how the process usually is ? Or should I distrust my attorney for pushing me to invest in this without an actual breakdown of my net compensation before I go foward?

Expert:  Dimitry K., Esq. replied 1 year ago.

Thank you for your follow-up, Floyd.

Generally an attorney is not required to inform you of the investment amount--an attorney is out to get you the settlement, not to generally help you invest the funds. Also, generally personally injury funds are tax-free, and if that is what you are getting, the option is likely sufficient. I am only concerned if there is also punitive damages involved in the settlement--those are generally not tax free. Obtaining a full break-down of the funds is simply in your best interest, the reward might end up being partially taxable.

Good luck.

Customer: replied 1 year ago.

Ive asked for the breakdown several times but my attorney insists it will be available in 3 weeks. He also says the investment decision has to be made now beforehand or the check would be cut straight to him instead on the investment firm with the tax free offer. It doesnt make sense, but Is this possible ? Your legal advice on how to handle this situation would be greatly appreciated

Expert:  Dimitry K., Esq. replied 1 year ago.

Thank you for your follow-up.

Floyd, my apologies but while I am an attorney, I am not your attorney. I am barred from site rules in providing you with direct 'legal advice'. While I can provide you with legal information, I cannot directly advise you. As for the investment decision, that is a possible condition but even so that requirement that you agree first must be written somewhere in the documentation--without it you simply have nothing actionable in case this ends up being defaulted upon.

Good luck.

Customer: replied 1 year ago.

I have a proposal with the firm with a plan in mind, are the numbers straight foward or are there numbers in play that I should get CPA advice from or doublecheck?

Expert:  Dimitry K., Esq. replied 1 year ago.

Floyd,

Gettinga written document ensuring that the funds are tax-free and what the potential investment would be is generally sufficient. It is only if the documentation does not exist, is not counter-signed by the courts, or not pledged would you need an additional evaluation. Beyond that obtaining a CPA review is likely an additional expense that you do not require.

Good luck.

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