United Settlement Advantage® for Claimants
Is there a minimum or maximum amount that can be placed into United Settlement Advantage® (USA)?
The minimum amount for USA is $250,000.00. There is no maximum.
Does the claimant need to structure the entire settlement?
No, the claimant can choose to structure only a portion of the settlement if desired.
Can the claimant utilize more than one settlement product?
Yes. Each claimant’s settlement plan should reflect their unique needs and goals. For instance, some claimants may want to split their settlements between USA, a structured settlement annuity, and cash.
What types of cases are eligible for USA?
USA can be used in a variety of cases. Claimants receiving settlements from personal injury, wrongful death, and workers’ compensation claims (i.e., qualified cases) can receive income tax-free payments. Claimants in non-physical injury cases (i.e. non-qualified cases) can receive income tax-deferred payments. Non-qualified case types include, but are not limited to: punitive disputes, employment disputes, discrimination, breach of contract, property damage, environmental claims, long-term disability, construction defect, sexual harassment, fraud, installment sales, and pre- August 5, 1997 workers’ compensation cases.
Where are the assets funding the USA payments held?
Upon receipt of the funding amount in Barbados, the assignment company immediately sends funds via wire transfer to a trust company in the United States for custodianship, administration, and management. The assets are held by the U.S.-domiciled trust company as the funds’ custodian for the life of the account. Additionally, if requested by the claimant, the trust company will transfer the funds to an external financial advisor’s platform for funds management.
What are the fees for USA?
The fees for USA are:
One-time assignment/administration fee of $1,400
Annual USA Program Fee of 1% of the value of the United Settlement Advantage® account each year, taken at the time of account establishment and on or about each anniversary thereafter. This program fee covers the ongoing program administration costs, operating expenses of the assignment company and custodial and administrative services provided by the trust company. If investment advisory services by an external financial advisor or active management by the trust company are desired, the fees of the external advisor or the trust company would be added to the fees outlined above.
Are the assets within USA accounts protected from creditors of the claimant?
While the claimant would be the payee of the future payments, the assets used to fund the USA payments are owned by the assignee, United Assignments, pursuant to a non-qualified assignment agreement.
Since the claimant has the right to receive periodic payments but does not have ownership rights in the underlying assets, the assets are not subject to claims of the claimant’s creditors.
Why is the assignment company located in Barbados?
The Assignment Company is domiciled in Barbados to make use of the benefits of the US-Barbados Tax Treaty to prevent double taxation.
What is the role of a trust company?
A trust company serves as the master custodian and administrator of the USA program. It is responsible for accounting, tracking, reporting (including tax reporting), and calculations on behalf of the assignment company.
Can the claimant designate beneficiaries?
Yes, the claimant can designate both primary and contingent beneficiaries, and may change them at any time in the future.
What happens to the USA payments when the beneficiary dies?
Upon the death of the claimant, the remaining USA payments will be made to the beneficiary based on the existing schedule.
What type of tax reporting is required for USA?
USA accounts funded by qualified settlements are tax-exempt and do not require tax reporting. For non-qualified cases, each year the payments are made, the trust company will issue a 1099-MISC to the claimant on behalf of the assignment company. The payments are reported as ordinary income.
Can the claimant view the balances in the USA account online?
Yes, online view-only access to the account is available.
United Fee Advantage® for Attorneys
Is there a minimum or maximum amount that can be placed into United Fee Advantage® (UFA)?
The minimum amount for UFA is $100,000.00. There is no maximum.
Can the payee be the law firm?
Yes, the payee can be either the attorney or the law firm. The payee will be reflected in the settlement documents.
Can UFA be used for a claimant in a physical or non-physical injury case (non-qualified settlement)?
UFA is our attorney client product. We offer United Settlement Advantage® (USA) for claimants involved in physical and non-physical injury cases. Please contact us for information on USA.
Where are the assets funding the United Fee Advantage® payments held?
Upon receipt of the funding amount in Barbados, the assignment company immediately sends funds via wire transfer to a trust company in the United States for custodianship, administration, and management. At the completion of the UFA transaction, the assets are held by the U.S.-domiciled trust company as the funds’ custodian for the life of the account. Additionally, if requested by the attorney, the trust company may transfer the funds to an external financial advisor’s platform.
What are the fees for UFA?
The fees for UFA are:
One-time assignment/administration fee of $1,400
Annual UFA Program Fee of 1% of the value of the United Fee Advantage® account each year, taken at the time of account establishment and on or about each anniversary thereafter. This program fee covers the ongoing program administration costs, operating expenses of the assignment company and custodial and administrative services provided by the trust company. It also provides the attorney or law firm with access to the trust company’s investment asset allocation models at no additional cost. If investment advisory services by an external financial advisor or active management by the trust company are desired, the fees of the external advisor or the trust company would be added to the fees outlined above.
Can an attorney structure fees with UFA even if his or her client does not select a structured settlement?
Yes, a claimant structure is not necessary. UFA is available for stand-alone attorney fee structures.
Is UFA limited to physical injury cases?
No, UFA is available to attorneys for any type of contingency fee case.
Are the assets within UFA accounts protected from creditors of the attorney or law firm?
While the attorney or law firm would be the payee of the future payments, the assets used to fund the UFA payments are owned by the assignee, United Assignments, pursuant to a non-qualified assignment agreement.
Since the attorney and/or law firm have the right to receive periodic payments but do not have ownership rights in the underlying assets, the assets are not subject to claims of the attorney’s or law firm’s creditors.
Why is the assignment company located in Barbados?
The Assignment Company is domiciled in Barbados to make use of the benefits of the US-Barbados Tax Treaty to prevent double taxation.
What is the role of a trust company?
A trust company serves as the master custodian and administrator of the UFA program. It is responsible for accounting, tracking, reporting (including tax reporting), and calculations on behalf of the assignment company.
Can the attorney designate beneficiaries?
Yes, the attorney can designate both primary and contingent beneficiaries, and may change them at any time in the future.
What type of tax reporting is required for UFA?
Each year the payments are made, the trust company will issue a 1099-MISC on behalf of the assignment company to the attorney or law firm payee. The payments are reported as ordinary income.
Can the attorney view the balances in the UFA account online?
Yes, online view-only access to the account is available.
Do the laws governing ERISA plans as well as other deferred comp plans apply to the UFA program?
No, pursuant to the Childs case, a structured attorney fee payment is viewed as non-employee deferred compensation, not employee compensation (e.g., 401(k)). Further, it falls under Section 83 under the Childs decision and was exempted from the 409A deferred compensation regulations in Notice 2005-1. Copies of the Childs decision and Notice 2005-1 are available upon request.