Most settlement recipients lose their money within a few years to poor financial decisions. We help attorneys protect their clients by converting lump sums into guaranteed scheduled payments.
Protect non-wage settlement components
Protect vulnerable populations
Eliminate ongoing payment disputes
Ensure clients keep what they won
Settlement recipients frequently face mismanagement risks. A lump sum puts the entire award at risk from day one.
Guaranteed scheduled payments provide protection. Future payments keep coming — regardless of what happens to prior payments.
We work with attorneys across multiple practice areas. Each case type has unique structuring opportunities.
Protect non-wage settlement components from mismanagement
Learn More →Protect vulnerable populations from financial pressure
Learn More →One payment, zero ongoing contact between parties
Learn More →Contract, business, malpractice & property disputes
Learn More →Structuring is straightforward. The key is timing — we need to be involved before settlement is finalized.
Before you finalize terms, we review structuring options
Settlement agreement includes structure language
Defendant pays a highly-rated insurance company
Insurer makes guaranteed scheduled payments
Income that can't be mismanaged keeps coming
Employment settlement recipients face significant mismanagement risks. Structured settlements provide scheduled payments instead of lump sums.
Your client fought through years of discrimination, hostile work environments, or wrongful termination. They finally receive a settlement — and within a few years, the money is frequently gone. Lost to poor investments, financial pressure, and decisions made without professional guidance.
Structured settlements solve this by converting the lump sum into guaranteed scheduled payments. Your client cannot lose future payments to poor decisions — the payments keep coming regardless.
| Lump Sum | Structured ✓ | |
|---|---|---|
| Settlement Amount | $1,000,000 | $1,000,000 |
| Payment Structure | One payment | $50K/yr × 20 years |
| Mismanagement Protection | None | Protected* |
| Payment Security | High Risk | Insured* |
| Estimated Taxes Paid | $370,000 | $240,000 |
| Estimated After-Tax Value | $630,000 | $760,000 |
| Tax Timing Benefit | — | ~$130,000 |
Recipients cannot lose future payments to poor decisions
Insurance-backed payments continue regardless*
Monthly payments replace lost wages
May reduce annual tax burden (non-wage components only)
Eligible components: Emotional distress, punitive damages, and other non-wage components can be structured.
Not eligible: Wage components requiring W-2 reporting cannot be structured. Only non-wage settlement components qualify.
Timing is critical: The structure must be established before the claimant has an unconditional right to funds.
Civil rights recipients face intense financial pressure from multiple sources. Structured settlements remove access to large sums while ensuring income.
Civil rights settlement recipients are often members of vulnerable populations. When they receive a large lump sum, they frequently become targets for unwanted financial attention — from family, acquaintances, and others who learn about the settlement.
Structured settlements remove the large sum from the equation entirely. Instead, your client receives guaranteed scheduled payments. There is no large balance to attract attention, and future payments cannot be accessed prematurely.
| Lump Sum | Structured ✓ | |
|---|---|---|
| Settlement Amount | $1,000,000 | $1,000,000 |
| Payment Structure | One payment | $50K/yr × 20 years |
| Pressure from Others | Immediate Target | Reduced* |
| Future Payment Security | No Protection | Protected* |
| Estimated Taxes Paid | $370,000 | $240,000 |
| Estimated After-Tax Value | $630,000 | $760,000 |
| Tax Timing Benefit | — | ~$130,000 |
Future payments cannot be accessed prematurely
No large sum to attract unwanted attention
Insurance-backed payments continue regardless*
May reduce annual tax burden depending on circumstances
Payor pays once, recipient gets guaranteed monthly income, parties never interact again about payments.
Traditional alimony means years of monthly payments, monthly contact, and monthly opportunities for conflict. Missing payments lead to enforcement proceedings. Late payments lead to disputes. The financial relationship keeps former spouses tied together long after the divorce is final.
Structured alimony eliminates all of this. The payor makes one payment to an insurance company. The insurer takes over and makes guaranteed monthly payments to the recipient. Zero ongoing contact. Zero enforcement issues.
| Traditional | Structured ✓ | |
|---|---|---|
| Total Obligation | $500,000 | $500,000 |
| Duration | 10 yrs monthly | 10 yrs monthly |
| Payor Pays To | Ex-spouse | Insurer (once) |
| Ongoing Contact Required | 120 contacts | Zero* |
| Enforcement Risk | High | None* |
| Payor Present Value Cost | $500,000 | ~$425,000 |
| Payor Savings | — | ~$75,000 |
One payment, done forever. May pay less via present value discount.
Guaranteed income. No enforcement risk if payor defaults.*
Zero ongoing contact. No monthly disputes or contempt proceedings.
Clean file closure. No future modification or enforcement issues.
Settlement recipients frequently lose money to poor financial decisions. Structured settlements provide scheduled payments instead of lump sums.
Whether it's a contract dispute, business litigation, or professional malpractice case, the challenge is the same: your client receives a substantial settlement, and the money is at immediate risk of mismanagement. Poor investments, financial pressure, and impulsive decisions can eliminate the entire award.
Structured settlements convert the lump sum into guaranteed scheduled payments from a highly-rated insurer. Future payments cannot be lost to poor decisions — they keep coming regardless.
| Lump Sum | Structured ✓ | |
|---|---|---|
| Settlement Amount | $2,000,000 | $2,000,000 |
| Payment Structure | One payment | $100K/yr × 20 years |
| Mismanagement Protection | None | Protected* |
| Payment Certainty | At Risk | Insured* |
| Estimated Taxes Paid | $740,000 | $480,000 |
| Estimated After-Tax Value | $1,260,000 | $1,520,000 |
| Tax Timing Benefit | — | ~$260,000 |
Recipients cannot lose future payments to poor decisions
Insurance-backed payments continue regardless*
Scheduled payments provide predictable cash flow
May reduce annual tax burden depending on circumstances
Large contingency fees can be deferred over time to manage your personal tax burden. Structure must be in place at settlement.
When you earn a large contingency fee, the entire amount is taxable in the year received. For a $1 million fee, that can mean nearly half goes to taxes in a single year. By structuring your fee into scheduled payments over multiple years, you may stay in lower tax brackets — potentially keeping significantly more of what you earned.
| Traditional | Structured ✓ | |
|---|---|---|
| Contingency Fee | $1,000,000 | $1,000,000 |
| Payment Structure | Year 1 | $100K/yr × 10 years |
| Year 1 Income | $1,000,000 | $100,000 |
| Year 1 Tax Burden | ~$470,000 | ~$34,000 |
| Total Taxes Over Time | $470,000 | ~$340,000 |
| After-Tax Value | $530,000 | $660,000 |
| Potential Tax Benefit | — | ~$130,000 |
Spread income over multiple years vs one large hit
May stay in lower brackets depending on circumstances
Scheduled payments provide predictable cash flow*
Reduced immediate access in exchange for tax benefit
IRS Scrutiny: IRS AM 2022-007 reflects increased focus on attorney fee structures. This makes proper structuring and documentation more important than ever.
Fee arrangement must be in place at settlement. Timing is critical — the structure must be established before you have an unconditional right to the fee.
Tax advisor essential. Given increased IRS scrutiny, consult your tax counsel before proceeding with fee structuring.
Deep insurance industry expertise. Protection-first approach. Education mission.
Sovereign Settlements was built by insurance industry veterans with decades of experience designing insurance solutions for Fortune 100 companies. Our founders spent years inside the industry — understanding how products are structured, how they're priced, how they perform over time, and most importantly, how they can be designed to meet real financial needs.
That deep, hands-on experience is what sets us apart. Most settlement consultants sell a product. We understand the product from the inside out — because we helped build products like it for some of the largest insurers in the country.
The value we bring isn't a set of credentials on a business card. It's a unique understanding of insurance solutions and how to use them to meet your client's actual financial needs. We know exactly what guarantees your client is getting, how the underlying insurance works, and whether the solution truly fits their situation.
While we see tremendous opportunity in non-qualified structured settlements — an underserved area where most attorneys don't even know structuring is an option — we handle qualified cases as well. Whatever the case type, our approach is the same: design the right insurance solution to protect your client's financial future.
Every competitor in this space leads with tax savings. We believe that misses the point entirely. The primary value of a structured settlement isn't a potential tax benefit — it's ensuring your client actually keeps the money they fought to receive.
Because we come from the insurance industry — not the sales side — we evaluate every structure through the lens of risk reduction first. We know how these products actually work, and we use that knowledge to design solutions that genuinely protect your clients. Tax timing management is a welcome bonus, but protection is always the foundation.
We lead with protecting your client's money — not tax tricks
Most attorneys don't know non-qualified structures exist
We understand how these products work from the inside — because we helped build them
We handle all case types — with special focus on underserved non-qualified cases
Common questions about non-qualified structured settlements.
A non-qualified structured settlement converts a lump sum settlement into guaranteed scheduled payments from a highly-rated insurance company. Unlike qualified structures (used for physical injury under IRC §130), non-qualified structures apply to employment discrimination, civil rights, divorce alimony, contract disputes, and other non-physical injury cases. The primary benefit is protection from financial mismanagement, with additional tax timing benefits. We handle both qualified and non-qualified cases, with particular expertise in the non-qualified space where most attorneys don't know structuring is an option.
Instead of receiving a lump sum that can be lost to poor investments, financial pressure, or impulsive decisions, your client receives guaranteed scheduled payments. Future payments cannot be lost to poor decisions — they keep coming regardless of what happens to prior payments. This provides substantially reduced risk compared to a lump sum, subject to the insurer's claims-paying ability.
No. Non-qualified structured settlements are tax-deferred, not tax-free. The settlement amount is still taxable — but instead of owing taxes on the entire amount in one year, taxes are owed as payments are received. This may reduce your client's annual tax burden by spreading taxable income over multiple years, depending on individual circumstances. Always consult a qualified tax advisor.
Timing is critical. The structure must be established before the claimant (or attorney, for fee structuring) has an unconditional right to the funds. This means we need to be involved before the settlement is finalized. The structuring language must be included in the settlement agreement itself.
No. Wage components requiring W-2 reporting cannot be structured. Only non-wage settlement components are eligible — such as emotional distress damages, punitive damages, and other non-wage amounts. This is an important distinction for employment discrimination cases.
No. Structured settlement payments are irrevocable once established. The payment schedule is set at the time of structuring and cannot be modified later. This is actually part of the protection — it prevents recipients from accessing funds impulsively. However, it also means reduced liquidity, which is an important trade-off to discuss with your client.
Attorneys can structure their own contingency fees to spread income over multiple years. However, IRS AM 2022-007 reflects increased IRS focus on attorney fee structures. This makes proper documentation and timing more important than ever. We strongly recommend consulting your tax counsel before proceeding with fee structuring.
Payments are made by highly-rated insurance companies, which provides a strong level of security. However, all structured settlement payments are subject to the insurer's claims-paying ability. This is why we work with top-rated carriers — to provide the strongest possible guarantee for your clients.
Tell us about your case and we'll show you how structuring can protect your client.