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A structured settlement is a financial or insurance arrangement whereby a claimant agrees to resolve a personal injury tort claim by receiving periodic payments on an agreed schedule rather than as a lump sum. purchaser of a structured settlement is an individual or company who buys a pre-existing structured settlement. Such settlements might include payouts for lottery winnings or annuities. For example, a court ordered structured settlement pays $5,000 a year for twenty years.
Footnote. 1. While it has many of the same features of a structured settlement, and may commonly be referred to as such, since the introduction of IRC 5891 in 2001 a non qualified assignment is technically not a structured settlement.What is a structured settlement?n thenon qualified structured settlement, each periodic payment is fully taxable to the payee in the year that each periodic payment is received. The type of tax applied will depend on the transaction.