A non-qualified assignment (NQA) is a periodic payment plan for taxable settlements. Milestone establishes NQAs that reduce clients’ tax burden and provide them with long-term financial security.
Non-qualified assignments for taxable settlements
Cases that do not involve personal bodily injury are taxable. Accepting settlement as a lump sum would impart the largest taxation on the plaintiff’s settlement value. In cases that are not considered bodily injury claims, it may be beneficial to establish a non-qualified assignment.
This strategy allows the plaintiff to spread their settlement into payments over time instead of receiving it in a lump sum. The plaintiff only pays taxes on the amount in payments they receive in a year, while the rest grows in a tax-deferred investment account.
Instead of being taxed on their entire settlement at once (and possibly falling into a higher tax bracket), a plaintiff can pay taxes on just the payments they receive in a year.
Interest on Pre-Tax Earnings
As the plaintiff receives periodic payments, the portion of the settlement that remains in the investment account will earn interest until it is paid out.
The periodic payment plan is customized to the plaintiff’s unique needs and financial goals – including the payment size, schedule, and more.
Settlements that Benefit from NQAs
If your client is about to receive a non-injury settlement, connect with Milestone for expert settlement planning solutions. We can create an NQA that provides lasting financial security and tax planning benefits.