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Using Structured Settlements to Protect Settlement Funds

Episode 16:  When clients receive substantial funds from their settlement or lawsuit, one of the options Calloway County Jeff Roberts recommends is a structured settlement to protect the funds.  Jeff interviews Cindy Chanley of Ringler Associates on the benefits provided via structured settlements.  In some cases, the structure can actually increase the amount paid to the client.  Let’s learn more in this podcast episode.

What Are Structured Settlements?

Many people are unfamiliar with the term structured settlement.  Jeff recommends them because structured settlements can maximize the money for the client and protect the money.  This is a general term used when 100% of money doesn’t go to the client at one time.  The funds are paid out over time or in a lump sum, at a future date.

With minor children involved in an injury case, it’s used fairly often.  It’s also a good idea when there’s a large settlement involving an injured adult.  Consider how often you hear stories about lottery winners who quickly spent their winnings only to be faced with difficulties afterwards.

If the client is receiving SSI or other means-tested benefits, a sudden influx of cash may disqualify him/her from receiving these ongoing benefits.  A structured settlement can be designed to ensure this doesn’t happen.  The funds can be set up in a special needs trust or Medicare set-aside account so they can be accessed to pay for specific needs.

What is Ringler Associates?

Ringler is the largest structured settlement consulting firm in the nation.  The company handles close to 50% of all of the structures done in the US, annually.  The representatives work with attorneys and insurance companies to offer consulting services for the benefit of the injured party.

Cindy started out handling insurance claims.  She eventually moved to Louisville to run a life insurance company’s structured settlement business.  Later, she decided to go to work with Ringler and has been doing this for about 15 years.  She’s also on the corporate Board of Directors for Ringler Associates.

Unfortunately, when people get seriously injured in automobile accident, trucking collision or workplace injury, life as they once knew it may be completely different for them, now.  Jeff’s goal is to do the best for his clients.  This means maximizing the money the client receives and also involving Ringler to evaluate what’s best for the client.  Sometimes, it’s not a structured settlement.  It may be a different tool or something else entirely. 

Do I Have To Use a Structured Settlement?

This decision is always up to the client.  Some people want to manage the funds themselves.  Other people may be a little uneasy handling large sums of money.  Jeff tries to educate the clients on what he thinks may be the best option, but again, the decision is completely up to the clients.

Jeff has been helping injured victims for over 27 years.  Because injury cases are complex, they can take several years to resolve.  During this time, Jeff and his clients get to know each other and a trust develops.  Many clients are happy to rely on Jeff’s advice and guidance, even after the case has been resolved.

Why Are Structured Settlements Used when a Minor Is Involved?

The courts won’t typically authorize the release of a large settlement check to a minor, or his/her parents.  Those funds are often placed in a blocked bank account with strict limitations on how they are to be used, until the minor turns 18 years of age.  At this point the funds can be accessed by the 18-year-old, who may not be thinking about the long-term.

Structured settlements can be designed to provide for specific expenses, including college tuition, specially adapted vehicles, funds to buy a house and more.  The parent can use the structure to help plan for the child’s future.  It’ll help to make the money last.

Are There Tax Consequences?

The federal government has very specific rules in the federal tax code.  The timing is very important.  Some people want to receive all of the funds and then decide what to do.  Decisions must be made before the funds go into the settlement to outline how the funds are to be paid.  If done correctly, with the appropriate language, the interest will also be tax-free to the injured person. 

Cindy explains that a settlement placed into a structure could potentially generate significant amount of interest.  That interest could grow and be distributed with no tax penalty, if it’s handled properly from the start.

The tax-free interest benefit may not be available if the person takes control of the funds first, and then decides to put them into a structured settlement.

What’s a Structured Settlement Earning These Days?

This is a common question, but the answer is the goal of structured settlements is safety and security, not interest rates.  It’s used to protect the funds and the injured person from poor decisions or other issues.

ABLE Accounts

Cindy can help Jeff and the client establish an ABLE Savings Account.  This is a special type of account that can receive up to $15,000 per year and allows more flexibility in how the money is spent.  The structured settlement can be designed to fund that account on a periodic basis, again, protecting the funds and enabling them to accumulate interest.  The distributions can also be tax-free if spent correctly.  This can also ensure the SSI benefits are not negatively impacted.

Special Needs Trust

A special needs trust can be set up to pay into the ABLE account.  Again, the structured settlement can be designed to fund the special needs trust, which will then fund the ABLE account. 

How Much Does It Cost To Have Ringler Set up a Structured Settlement?

It costs nothing.  Ringler is paid by the insurance company that is going to handle the structured settlement annuity.  All of the services provided by Ringler to the client are free. 

There are fees and minimum amounts involved to set up a special needs trust, but Ringler has relationships that make that much less expensive, with lower amounts required.

Can I Use a Structured Settlement for a Workers’ Compensation Settlement?

Yes.  The Kentucky workers’ comp income benefits are paid on a weekly basis.  If the settlement in the workers’ compensation award is a lump sum and significant enough, Ringler can use a Medicare Set Aside Account that can be used for future medical needs. 

There are many issues to be considered, including rules specific to Medicare, SSI, etc.  It’s best to have Jeff and Cindy work through your specific situation.

What about Non-Medicare Related Medical Expenses?

This can be a significant number.  It often involves medicine that’s not covered.  Home health expenses can mount up very quickly.  Both of these expenses can be very large over the injured worker’s lifetime.  Cindy will go through all of these numbers with the attorney and the client.  A Medicare Set Aside Account may be a good tool to use, as part of your structured settlement.

Handling a complicated personal injury case doesn’t stop when the case is settled or the verdict is rendered.  Jeff takes time to help his clients to work through the important decisions related to protecting the funds from the results of the case.  It’s one of the reason clients trust him enough to refer their friends and family members to him so often. 

Cindy Chanley explains how to use structured settlements to protect settlement funds

To contact Cindy Chanley at Ringler Associates:

Online Profile:

Office Phone:  (502) 569-9339

For more information, visit This podcast is meant to provide information and is not legal advice.  Jeff’s principal office is located at 509 Main Street, Murray, Kentucky.  Co-host Jim Ray is a non-attorney spokesperson.  This is an advertisement.