Structured Settlement Money

Structured Settlement Money Questions and Answers

Structured Settlement Money Questions

Structured settlement money helps the victim of an accident get money as a payment made in regular installments over a period of time. This is different than getting a cash award in a lump sum payment up front.

When you learn that you are going to receive a structured settlement, a lot of times you have questions about what it really is. So here are some of the more frequently asked questions, other than the most important, which is “How or when do I get my structured settlement money?”:

1. What is the definition of a structured settlement?

A structured settlement pays the person who has won the settlement over a period of time, instead of just paying all at once.

These payments are sometimes called “periodic payments.” In fact, here is what Wikipedia says about it “A structured settlement is a financial or insurance arrangement, defined by Internal Revenue Code as periodic payments; a claimant accepts to resolve a personal injury tort claim or to compromise a statutory periodic payment obligation.” Often, a structured settlement will be created through the purchase of one or more annuities, which guarantee the future payments. So, normally you will need to investigate annuities as well.

Structured settlements are fairly recent in the scheme of reparations. They began in Canada and quickly spread to the United States, England and Australia. Regulations vary among countries.

2. Am I able to put down my structured settlement money as collateral for a loan?

Usually, it can’t be listed as collateral, but one way that it does help is that you can list it as a form of income. This can be very helpful if you are making a big purchase, like a house.

3. Will I receive interest on money I get from a structured settlement?

No. The interest is included and, is therefore, tax-free. The only way to get additional interest, is to invest your payments. Of course, that money would be taxable, just like any other investment.

Remember, this is your money, so make certain that you ask questions if there is something that isn’t perfectly clear to you. Be sure that you understand everything and that everything is clear to both you and to your attorney.

Once the papers are signed, it’s non negotiable and you have to be happy with what you have been given, so it’s a good idea to be clear on all the details. Ask all of the questions that you want to know, and get all of the facts.

Structured Settlement Money Benefits

Several benefits are obvious when choosing  structured settlement money  in periodic payments, getting it over time,  as opposed to a lump sum payment.

The first benefit is that the periodic payments received by the recipient of a structured settlement is exempt from all taxes.  Under section 104 of the Internal Revenue Code of 1986 and it is clearly stated that structured settlement money in the form of periodic payments are totally tax free at both state and at federal levels.

The second major benefit could be that structured settlement money given out over time, when needed, prevents loss of the money due to  bad advice or bad judgment.  We have all heard the horror stories of those who have received huge lump sums of money and within a very short period of time, have ended up broke.  Keeping your structured settlement money, receiving payments could help avoid such disasters.

There are ways your taxes may be affected, beneficially or adversely, depending on the way you receive your settlement. It is always helpful to get advice from several, trusted, unbiased advisers before signing on the bottom line. You should consider tax obligations, total payout, current and future needs and other aspects of the arrangement. A financial adviser, tax accountant and your attorney will provide input.

Get Cash for Structured Settlement

If you are trying to get cash for Structured settlement payments, there are certain documents you will need to gather and you will need to thoroughly research the company that is going to buy your structured settlement.  But those are not the only things that you will need to consider.  You will need to ask yourself this question, “Will selling my structured settlement really be the best thing for my financial future?”

If your answer to this question is yes, then there are ways to “cash” out your settlement and get your structured settlement money, which we’ll discuss in a later article.

To find out about annuity transfers, try http://www.annuitytransfers.com/

Income or Living Benefit Riders

One of the hottest topics in the annuity industry is the income rider. These are also referred to as living benefit riders. These particular devices can be somewhat complex. Stan the annuity man is going to discuss income riders.

What did you think about 2011, well…..

Fasten Your Seatbelts, It’s Going to Be a Bumpy Year

Sure, U.S. stocks sank at various parts of the year (2011), including the period after the debt downgrade. But a late-year rally left major averages about where they began, as if the year was placid, not full of panic.

Last week, stocks fell 0.6% leaving the Dow Jones Industrial Average up 5.5% on the year. The Nasdaq Composite closed the year down 1.8%, and the Standard & Poor’s 500-stock index was flat (actually off 0.003%).

Predicting what 2012′s surprises will be is no easy task. Last year’s Sunday Journal outlook warned of rising interest rates and falling bond prices. But the experts were confounded: U.S. government bonds continued to rally.

We did get some predictions correct, such as anticipating China’s ability to rein in inflation without causing a severe economic downturn. It’s not clear whether Chinese leaders will continue to have such success in 2012, however.

Read more about some possible surprises for 2012 and beyond, based on views of some leading investors and analysts here: http://online.wsj.com/article/SB10001424052970204720204577128990068112940.html

Looking forward for the coming year and hoping for something better than 2011, in Financial Planning.

Financial advisers look ahead to 2012 and they discuss potential investment strategies, red flags and more.

This year has been characterized by wild daily fluctuations in the markets as investors reacted to various bits of good (Europe has solved its debt crisis!) and bad (Europe has not solved its debt crisis!) economic news.

But much like a roller coaster, the markets ended the year about where they started. The S&P 500 ended the year up 0.4 percent while the Dow Jones industrial average was up 5.5 percent. To shed more light on what the next 12 months might look like, we turned to a handful of money managers and financial advisers in Charlotte and the Triangle. Each answered a series of questions about investing strategies, economic indicators to watch in the months ahead and what they’ve learned from the global economic crisis.

Although it should go without saying, we’ll say it anyway: None of this advice is foolproof. Investors should do their own research, stay diversified and assess their own appetite for risk.

Read more here: http://www.charlotteobserver.com/2011/12/31/2887468/financial-advisers-look-ahead.html#storylink=cpy

The article below discusses the benefits of structured settlement payments as compensation for an injury you may have suffered and have become entitled to damage compensation.

Compensation for My Personal Injury

If a personal injury attorney determines that you do, indeed, have a valid personal injury case, then you will be entitled to damages.

ORLANDO, FL, December 31, 2011 /24-7PressRelease/ — If a personal injury attorney determines that you do, indeed, have a valid personal injury case, then you will be entitled to damages. Damages are basically the expenses or losses you have incurred due to the negligence of the other person and may included both economic and non-economic factors. An economic expense or damage would be the cost of doctor visits, while a non-economic damage would be pain and suffering as that cannot be actually measured or assigned a cost like a doctor’s visit can. The damages to which you will be entitled all depend on the injuries you suffered and the circumstances of your injuries (i.e. if the defendant shows malice or reckless disregard for your safety).

Personal Injury Damages

The following is a comprehensive list of the damages available in personal injury claims. Please keep in mind that you will not necessarily be entitled to all of the damages listed below, but more likely, you will receive some combination of the damages:

- Present and future medical expenses

- Present and future lost wages

- Household services (the cost of hiring someone to maintain the plaintiff’s house during recovery)

- Mental anguish

- Loss of consortium (loss of the benefits of a relationship because of the accident or injury)

- Loss of enjoyment of life

- Pain and suffering

- Permanent disability

- Disfigurement

- Funeral expenses in the event of wrongful death

Settling a Personal Injury Case

Personal injury cases are settled either in a formal lawsuit or, more commonly, through an informal settlement (a negotiation between the plaintiff and defendant). When the verdict or negotiation is reached, the compensation will be awarded. Typically, minor to moderate injury cases are compensated with a lump sum payment, while more severe injury cases are often settled with a structured settlement. There are some benefits to structured settlements such as:

- Structured settlements are often tax-free income because they are usually in the form of annuities or U.S. Treasure Securities, which are not taxed at the state or federal level.

- Structured settlement payments are made over time, so the injured receives an income for several years to a lifetime.

- Often the injured can schedule the payments to best suit his or her needs.

If you feel you may have a personal injury case and live in the Orlando, Florida area, please visit the website of The Law Offices of Michael V. Barszcz, M.D., J.D. today to schedule a confidential consultation or to learn more about personal injury law at www.themdjd.com.

This article appeared here at:  http://world.einnews.com/247pr/254976

Selling off structured settlement and using the proceeds to pay off debt

Nowadays, there are many people who receive structured settlements as a consequence of a financial arrangement reached after a legal action or a personal injury lawsuit. This financial agreement will include payment of dollars throughout a stipulated period of time and this makes the structured settlements grow in popularity over the past few decades. Being in debt and staying in debt are both harassing experiences and therefore you need to look for ways in which you can get out of the debt cycle. Selling off your structured debt settlements is one worthy way of getting immediate cash to pay back your creditors. If you’re not aware of the ways in which you can seek debt relief by selling off structured settlements, here are some steps.

• Get in touch with a trustworthy buyer: The first step that you need to take is to look for a buyer who will be ready to purchase the structured settlement from you. N this case, you have to shop around among various buyers and make sure that you choose the buyer who can provide you with a lump sum amount of cash in lieu of the structured settlement. In case you ultimately work with an authentic company, you can expect some valuable advice regarding the maximum amount that you can turn into cash in order to repay your revolving credit card debt. You should also bear a strong drive to make this entire process successful.
• Compare the amount you’ll sell and repay: The next step that you have to take is to calculate the total amount of debt that you owe to your credit card debtors. Unless you know this amount, it is impossible for you to decide the amount that you will sell off to the structured settlement buyer. Make sure that you sell off the exact amount that you need to pay back to your creditors and not anything more than that. If you can store some more of it, you may not have to seek the help of professional debt relief companies to repay your debt. You can adopt this same process to put an end to all your financial woes. Restrict your selling so as to be able to make use of it in the near future.
• Start repaying the debt soon: As soon as you get the lump sum amount of money from the structured settlement buyer, you should start repaying your credit card debts as soon as possible. Credit card debts always have a negative impact on your credit score and therefore you need to make sure that you delete them as fast as is humanly possible for you. Don’t distribute the proceeds among other sources as using it for taking financial moves is usually appreciated.

Therefore, when you’re drowning in a sea of credit card debt and you don’t want to take help of a professional agent to get out of debt, you should try selling off your structured settlements. Take the steps mentioned above and then use the money to repay your high interest debt.

Structured settlements can be undone.

Just found this article on how to be a better lawyer.  This was interesting, but what was most interesting was #4, “Make sure you are aware that structured settlements can be undone.”   This is what this site is all about.

A structured settlement or even an annuity that is purchased for financial planning purposes, can be great tools.  According to Hank Didier  “history has shown us that our clients can and will sell them if their overall settlement plan is inflexible as things change over time.”   It’s well known that many people end up selling their annuity to get their structured settlement money quickly in times of need, like emergencies.  And they end up trading quite a bit of the money that they would have received, had they waited for the periodic payments, in exchange for getting out their money fast.

The reason that he brings this up is “Because this often happens at a great loss”, therefore he tells his fellow lawyers that “we must help our clients look to options that have the flexibility to allow them to adapt financially over time as situations may change.”

If structured settlement make sense to the client’s situation, “then consider using both recurring and lump sum payments over time that provide for the unexpected. By doing this, you are helping to minimize the likelihood that your clients may consider approaching a high-discount rate factoring company to sell their structured settlement for ‘cash now’.”

This is great advice for both the attorney and the person who could possibly be awarded a structured settlement or in the financial planning realm, someone who is thinking of using annuities as part of their plan for the future.

But whatever the case, individuals should consult with their own lawyers, accountants or financial planners.  This, is exactly how he ends his article, click here to read more, “Also, explain to your clients that if they ever do run into trouble, they should call you or their structured settlement professional for help, as you can help them find the right solution while protecting them from predatory factoring companies.”

Annuities are an investment people think of when the chips are down, according to research from a business professor at the Richard Ivey School of Business.

“Alessandro Previtero, an expert in behavioural finance and financial decision making, examined annuities versus lump-sum payments, widely considered the two most popular types of retirement plans. Over a six-year period from 2002 to 2008, he surveyed 100,000 retirees with defined-benefit pension plans.

He found that whether retirees chose lump-sum payments or annuities was tied to how well the stock market was performing.”

So it appears that if the markets have been down for the past 12 months, annuities became more of a first choice for retirees.  But, the reverse happens if the markets are up, then lump sum payments were preferred.

“People have a strong tendency to think that what has happened will continue to happen,” he says. “I call it myopic because people only look at very short-term trends.”

Of course, investing in an annuity people receive a guaranteed, regular income for life.  But, even if this sounds simple, there are many things to consider before buying an annuity.

For more relevant information on annuities and other financial topics, such as the article “When Stocks Stumble, Investors Turn To Annuities” at http://www.theglobeandmail.com/.

Structured settlement annuities if used as a vehicle for periodic payments due to an accident, injury etc, are not get rich quick programs nor are they meant to be.

Because of the difficulty in getting out structured settlement money on a whim, such as, I want a new car, a cruise would be nice or whatever emergency you could think up, structured settlement annuities are a way to “get rich slowly”.  Sometimes it is better, than being able to cash in your stocks, mutual funds or any other investment.

“The financial analogy is that having all your money in a savings or checking account is like having food in the refrigerator. Putting money in a mutual fund or certificate of deposit, where it takes some effort (and sometimes penalties and tax consequences) to cash it in, is similar to driving to the store two miles away. A structured settlement is like the 25-mile drive for food. You have to do a lot of work to sell it and take a huge financial hit when you do.

It is better just to hang onto the structured settlement and stay disciplined, just like it is better to stay on a diet.

There is something similar to a structured settlement called an immediate annuity. It pays income for a person’s life, just like a defined benefit pension plan. Although people seem to like lifetime income from a retirement plan, a Smart Money article stated what I long suspected: Few people buy them on their own.”

For more information on structured settlement annuities, read Don McNay’s article “Don’t Run Out Of Money Before You Run Out Of Time”.

Quest for yield fuels interest in risky investment vehicle

Many people are looking for an alternative investment opportunity, other than stocks, bonds, and definitely no CDs or savings accounts.  These types of investments are either very risky in today’s investment climate or they don’t yield enough to even cover the cost of living increases.

These investors are discovering a vehicle in which to put their cash, based on annuites awarded in wrongful-death or injury lawsuits that are being sold as factored structured settlements.

With this product, an investor is purchasing the right to the structured settlement money awarded to a victim or his or her family members in the form of a fixed annuity.

At a time when 5 year certifcates of deposit may yeild a return of, perhaps 2%, the 7% yield on these products certainly seems like something to look into now.

“It’s not exactly easy to get this at first glance, and it’s hard to explain the business in an elevator conversation,” said Matt Bracy, general counsel of Settlement Capital Corp. “Our typical investors are sophisticated, have investigated this a bit and are represented by counsel.”

Read more about this on Investment News.