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FAQ for Trial Attorneys
  1. Introduction
  2. What is a Structured Settlement?
  3. Advantages to the Plaintiff
  4. Disadvantages to the Plaintiff
  5. Managing the Disadvantages
  6. Appropriate Cases
  7. Inappropriate Cases
  8. Case Size
  9. Why Annuities?
  10. Annuity Pricing
  11. Reduced Life Expect. Discounts
  12. What is an "Assignment"?
  13. Structure of the Deal
  14. Insurance Company Ratings
  15. The Closing Process
  16. What Settlement Brokers Do
  17. How Are SS Brokers Paid?
  18. If the Defense Has Their Own Broker, How will My Broker Be Paid?
Home Page > "How to" For Plaintiff Attorneys >ABC's

What is an "Assignment"?

An agreement to make periodic future payments to injured plaintiffs means the creation of a long-term financial obligation. In order for the plaintiff to receive payments over time, someone has to remain on the hook to make them.

Defendants and their insurers aren't interested in adding new liabilities to their books. They want a full and final release and the extinguishment of all liabilities related to the claim.

A solution was developed to solve this problem: it is resolved by "novation", the substitution of one party for another in a contract. The settlement agreement itself will first establish the liability for future payments, then reserve the right of the defendant to "assign" the obligations to a third party, in accordance with IRC Section 130 (the tax code section that governs these transactions).

Contemporaneously with the execution of the Settlement Agreement, the parties also execute an "Assignment Agreement" to achieve this result. (See also "Structure Of The Deal")