The Closing Process

A closing of a typical structured settlement might involve the following steps:

1. Parties reach agreement to settle. Defendant agrees to structure the settlement.
   
   
2. Schedule of payments is finalized (broker meets with plaintiff to refine payment stream.
   
   
3. Purchasing broker prepares draft Settlement Agreement & Assignment Agreement and circulates them to the parties for revision and comment. Documents will generally incorporate:
   
   
   • the specific schedule of periodic payments
   • the defendant's right to assign their future obligations to a third party
   • the name of the party assuming liability from the defendant
   • the secondary beneficiary to whom guaranteed payments should go in the event of death of the primary recipient
   • confirmation that the injuries sustained are physical in nature and qualify under IRC Section 104 (if applicable)
   • confirmation that the settlement is established under the rules contained in IRC Section 130 (if applicable).
     
     
4. The parties exercise due diligence by having their settlement broker review draft documents for compliance with generally accepted structured settlement standards.
   
   
5. Final documents are prepared, circulated and executed.
   
   
6. Defendant/insurer issues check directly to annuity/assignment company for purchase of settlement annuities. (Actual purchase coordinated by purchasing broker.)
   
   
7. Purchasing broker collects closing documentation from the parties and submits it to annuity company(ies). Typical items include: birth certificate, social security number, name, address and telephone number, secondary beneficiary (if not the estate), etc.
   
   
8. Annuity contract is issued, sent to owner with copies to other parties. Contract issuance takes time. Six weeks is not unusual.
   
   
9. Case closed.