Pros and Cons of Accelerating the Payout of Structured Settlements
In certain jurisdictions such as the United States (but less common in Malaysia), settlements for claims involving personal injury, workers compensation, guardianship, wrongful death lawsuits and even product liability may involve what is known as structured settlement. A structured settlement is basically an arrangement whereby the claimant get tax-free payment over an agreed period of time rather than getting the full payment in one lump sum upon settlement of their claim. This structured settlement is sometimes called annuity payment though the latter is usually subject to tax.
There are companies out there which now offer the claimant an option to sell their structured settlement for a lump sum payment instead and thus, accelerating the payment. This can be done as a one lump sum payment or partial lump sum payment (eg. you only opt to cash out half of your total structured settlement sum).
One of the advantages with such an accelerated payment is the perceived rigidity associated with structured settlement. The time factor (of having to wait) for the monies to be paid is one. Moreover, it would not be possible to add an additional beneficiary to the payee unless a court order is obtained (for obvious reasons). Another advantage of accelerated payment would be to cater for opportunity cost. The claimant may be able to use the accelerated payment to invest in certain investment vehicles which may give him better returns over the same period of time connected to the structured settlement. Read more
Non-Muslim Divorce
In Malaysia, the current law governing divorce for non-muslims is the Law Reform (Marriage and Divorce) Act 1976. Of late, there are some controversies regarding the divorce procedures for a non-muslim couple whereby one of the partners have converted to Islam as his or her religion of choice. The recent Federal Court judgment in Subashini’s case remains some sort of headache for such a couple as it created some form of lacuna by saying that the civil and syariah courts are of equal standing and both can issue directions or orders notwithstanding the civil court remaining the correct forum for the dissolution of the civil marriage.
For other non-muslim couples without such a headache, the provisions in Section 8 and Section 4(3) of the Law Reform (Marriage and Divorce) Act 1976 states the instances where a marriage can be dissolved. The former applies to marriages solemnized from 1st of March, 1982 whilst the latter applies to marriages solemnized prior to that date.
Section 8 provides that such marriages may be dissolved on the death of one of the parties, or by order of a court of competent jurisdiction (i.e. a decree of divorce), or by a decree made by a court of competent jurisdiction that the marriage is null and void (i.e. a decree of nullity).
Section 4(3) provides that every such marriage existing prior to that date, unless void under the law, religion, custom or usage under which it was solemnized, shall continue until it is dissolved by the death of one of the parties, or by order of a court of competent jurisdiction (i.e. a decree of divorce) or by a decree of nullity made by a court of competent jurisdiction. In other words, unless the marriage is not valid, it shall continue to subsist until it is dissolved in either of the three scenarios given. Read more