What happens to structure payments when a recipient dies?

March 29, 2016

Generally, some or all of the structure payments are guaranteed to be paid, even in the event of the death of the original recipient.  Depending on the design of the structured settlement, the early passing of a loved one may mean that the remaining guaranteed payments may continue to the estate of the initial recipient, or to a “secondary payee” that has been named specifically (like the beneficiary under a life insurance policy or RRSP).

These payments remain tax-free to the estate or named secondary payee and are paid out on the same dates and in the same amounts, just as they were to your loved one.  Only after any minimum guarantee period has passed or in those rare cases where the settlement does not provide for any minimum guarantee, will the payments simply stop on the death of the initial recipient.

McKellar Structured Settlements Inc.’s Client Services department has a dedicated Estate Administrator to answer any questions and assist in guiding you through the death claim process upon the passing of a loved one.  We will deal with the life companies directly to help ease your burden, and provide you with the necessary information required to settle the death claim.