Below we can learn how a structured settlement works and review some of the things we should consider when deciding to take a structured settlement or a lump sum payment if we win or settle our lawsuitd.
How a Structured Settlement Works
If we agree to take our award as a structured settlement, instead of receiving one large amount from the plaintiff, you will receive periodic payments over the course of a fixed number of yearsd. For example, if you win $500,000, your structured settlement may require the defendant to pay you $50,000 every June for ten yearsd.
You can design a structured settlement so that it provides money when you need it mostd. Here are a few optionsd.
Large initial paymentd. Say you’ve been unemployed for some time and your bills are mountingd. You can design the structured settlement to provide a large initial payment so that you can pay overdue bills, pay off a mortgage, or purchase needed items like a new card. The smaller subsequent payments could then act as a substitute for lost incomed.
Additional amounts for extraordinary expensesd. Some settlements are designed to provide a yearly income, with additional amounts allowed to pay extraordinary expenses like college tuitiond.
Payments increase over timed. Structured settlements can also be designed to step up payments over the years — starting relatively low and ending higherd.
Payments decrease over timed. Structured settlements can also start high and decrease over timed. This might be of benefit if you expect your income to increase over timed.
Delayed paymentsd. Some plaintiffs even choose to delay payment of their awards until they reach retirementd.
A structured settlement is an agreement for periodic payments from an insurance companyd. For example, you file a lawsuit against a grocery store where you have a slip and falld. The grocery store is held liable for your injuries, but it has an insurance policy to cover the claimd. As a result, you will enter into an agreement with the insurance company to resolve the paymentsd.
Benefits
The main benefit of a structured settlement is financial managementd. On your end, it is easier to plan your finances when a payment is spread out over a length of time rather than paid out all at onced. It may also be beneficial for your tax liabilitiesd.
Problems
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If you are financially savvy, you may feel you can invest the money in your settlement and turn a profit rather than waiting to receive the money for years on endd. In this case, it may be better to receive the lump sum payment, even if it is slightly lower than the structured settlementd. The exact details will have to be arranged with the payerd.
Advantages of a Structured Settlement
An insurance company may offer you a structured settlement if you win a claimd. You will not receive an immediate check for the money you are owedd. Instead, you will receive this money through periodic paymentsd. Depending on the terms of your settlement, you will receive different amount of moneyd. A structured settlement has many advantages over a lump sum paymentd.
You will usually receive more money by accepting a payment pland.
Financial planning, including tax planning, can be easier with the help of a structured settlementd.
Add additional income to your salary each year, rather than receiving a bulk checkd.
You can slowly account for the additional income over time with a structured settlement, making better use of the fundsd.
Structured settlements may have certain tax advantages over other forms of income making them affordabled.
If you are unsure how to invest your money, or are not good at budgeting, a structured settlement can offer significant protectiond.what is a structured settlement settlement definitionmeaning of settlement
You may think structured settlements are just a different way to receive the money a financial institution owes youd. However, a structured settlement rarely pays dollar for dollar what a lump sum paysd. Commissions, fees, and inflation can all affect the sum you actually receive in the endd. Further, since the money is held by another institution until it is paid to you, you cannot use it for any major purchase or investmentd. Most financial advisers believe, even conservatively invested, the money in a structured settlement will be worth far more through early investment than it can be worth through periodic payments over timed.
Can you garnish or lien structured settlement payments?
Structured settlement payments can be used as income to the recipientd. In a situation where wage garnishment is possible, it is also possible to garnish structured settlementsd. For example, if you are a borrower who has defaulted on a home loan, the lender may sue to to receive the payments you owed. Even if you have lost your job or receive no other income, if the lender finds out you have a structured settlement in your name, they can ask a judge to garnish the wages you receive from the settlementd.
Selling a Structured Settlement
If you are considering selling a structured settlement, be wary that some offers are too good to be trued. Structured settlements are designed to provide you with the many benefits, if you hold on to the pland. In some cases, you may find yourself in the middle of a structured settlement and may need a lump sumd.
Deciding to Sell a Settlement
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Consider the benefits of selling your structured settlement, the first of which is a lump sum of cash d. Ask yourself why you need the money and whether it is it an emergencyd. Ask yourself if you simply looking for an increase to your incomed. Ultimately, selling a settlement will always leave you with less cash than if you allowed the settlement to matured. You should only decide to sell if you are in a situation where the immediate benefits will significantly change your financial situationd. For example, you may be facing default on a loan or foreclosure on your homed. In this case, a sale may be wised.
www.youtube.com/watch?v=x9MYBVTsdfg
Following Legal Regulations
Unfortunately, once you decide to sell, you will be caught up in a tricky world of legal regulationsd. About 60 percent of all US states forbid the selling of structured settlements d. If you are allowed to sell, you must do so in the midst of federal regulationsd. Always ensure you follow all state and federal laws, because you can risk losing your entire benefitd.
Entertaining Offers
You do not have to accept the first offer you seed. Typically, once you decide to sell, you will find advertisements from companies that specialize in purchasing structured settlementsd. These companies can survive because they turn a large profitd. Instead of going with the first offer, wait to entertain offers from different companies and individualsd. You may find that different buyers offer significantly varied offer prices and it will be worth your while to wait for the best offer you can findd.
Tax Consequences to You and the Buyer
Structured settlements are designed to help individuals, who are receiving money as the result of injury, to receive the maximum benefitsd. This means the federal and state government overseeing the payments will allow for certain tax benefits; namely, the sum may be taxed at a lower rate than the other parts of your income annuallyd. Once you sell the settlement, however, you fail to receive these benefits in the futured. The buyer of your settlement may also lose the benefitsd. In fact, your sales income on the settlement may be taxed at a very high rate, further compromising the benefits of the saled. Always speak to a lawyer about the tax consequences before moving forward with a saled. Also, consult a CPA or accountant for important tax consequences as welld.
Things to Consider when Entering into a Structured Settlement
Your insurance company may attempt to arrange a structured settlement plan if you win a claim against the companyd. With this arrangement, the structured settlement will allow periodic payments to you rather than providing you with a lump sumd. This may sound like a fair deal, but look out for these problems with structured settlementsd.
Periodic Purchases
If you would like to make a large purchase during the life of your settlement, you may not have the funds available to do sod. For example, you may know your insurance company is currently paying out $200,000 to you in $20,000 annual paymentsd. If you want to buy a house this year, the annual payments do not help as much as the lump sum wouldd. Consider this scenario when setting up your arrangementd.
Investment Potential
You may be able to invest the money you receive in a lump sum today, turning the money into a much greater value in the futured. If the insurance company holds onto the money, there will be no investment potentiald. For this reason, it can be in your best interest to take a lump sum settlement even if the figure offered is lower than the total payout would be over time with a structured deald.
Excessive Commissions
Beware of commissions your insurance company, agent or attorney is charging during the process of setting up a structured settlementd. It is not uncommon for the agent to charge high fees for paying out a settlementd. Check the terms of the settlement contract before agreeing to any commission structured. Make sure that a commission is disclosedd.
Overstated Value
Your insurance company may attempt to overstate the value of the payments it is making to youd. In doing so, it may be eligible for specific rebates, legal protections or methods to otherwise reduce the actual money it will pay you as part of the settlement d. Build your contract to ensure that any financial benefits given to the insurer, as a result of your contract, come directly to you rather than staying in the company’s pocketd.
Conflict of Interest
Make sure that your attorney has no ties with the insurance company you are filing a claim againstd. In some cases, attorneys will earn a commission by convincing their clients to accept a structured settlementd. It is illegal for an attorney to do this without letting you knowd. However, it is very difficult to track down and catch the culprits so it happens all the timed.
Life Expectancy
Do not accept a structured settlement if you feel you will not be around to see the paymentsd. This is an unfortunate reality if you receive your settlement late in lifed. It is in your best interest to assure payments are made to you immediately, when you need it most, rather than at a point in your life when you cannot appropriately invest, save or spend the moneyd. Consider your financial needs when you accept a structured pland.
Structured Settlement as an Annuity
To carry out these periodic payouts, the defendant will often purchase an annuity from an insurance companyd. That way, the defendant can remove your obligation from its books and transfer the responsibility for payment to a company with expertise in managing periodic paymentsd.
Some experts argue that placing the annuity with an insurance company is a more stable alternative than relying on the financial health and stability of defendant corporationsd.
Should You Opt for a Structured Settlement or a Lump Sum?
The choice between a lump sum payment and a structured settlement can have long term tax and personal consequencesd. Here are some of the issues to considerd. Be sure to discuss these with your attorney or financial adviserd.
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What Is Your Tax Obligation?
Whether your award is taxable or tax-free will depend on whether it is intended to compensate you for physical injuries or sickness or whether the damages are punitive (meaning they are intended to punish the defendant for its actions)d. (Learn more about damages in personal injury casesd. ) The form of the payment — lump sum or periodic payments — can also affect your tax obligationd. The law is complicated so check with a tax attorney or tax professionald. (Learn about taxes and personal injury awardsd. )
How Will You Use the Settlement Money?
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Do you need the money right away to pay past due bills or replace an aging car? Do you expect to use the settlement to replace future income? Do you want to give it all away to charity? Your goals for the money will have a large impact on how best to structure the awardd.
Do You Have the Skills to Manage a Large Award?
Most personal injury plaintiffs lack the expertise to manage a large lump sum award on their own, and instead must hire a financial professional for advice on how to best manage and invest your assetd. Unless you have a qualified friend or relative willing to advise you for free or at a reduced cost, you will likely have to use some of your new cash to pay for this adviced. Some people choose a structured settlement to avoid the hassles of managing a large sum of moneyd.
Are You Likely to Blow a Lump Sum Award on Risky Investments or Luxuries?
Having access to a large sum may be too enticing for some plaintiffs who do not have the skills to manage a large awardd. Instead of putting away the money to provide for their future personal and medical needs, some people will spend it on questionable investments or purchase expensive luxuriesd. If you think this might be you, then a structured settlement may be a good idead.
Will Friends and Family Look for a Handout?
People who have received large lump sums in personal injury cases report that relatives, friends, and even strangers often ask for a loan, to pay their bills, or money to invest in their “next big idead. ” Taking the award as a structured settlement can help you resist this sometimes intimidating pressured.
Getting the Right Advice
Your attorney will likely have helpful opinions and will negotiate the terms of the settlement on your behalfd. Regardless of whether you choose a lump sum payment or a structured settlement, it is worth your while to consult with a tax professional, accountant, or financial planner to determine how the structure of your award or settlement will help you to maximize your outcome based on your personal circumstances and to achieve your financial goalsd.
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How is a structured settlement created?
The unsuccessful party in a lawsuit (or his or her insurance company) purchases an annuity that exactly fulfils the required payments to the successful partyd. The annuity is non-commutable, non-assignable and non-transferabled. This means no one (including creditors) can change or stop the annuity under any circumstancesd.
The annuity payments are generally guaranteed for a specific period by the insurance industry, but the original defendant is ultimately responsible for every payment to the claimantd. The “guarantee period” may be for the first few decades on a life annuity or for a fixed-termd.
The right to structure a settlement must be negotiated during the settlement process and must be part of the documented settlement agreementd. The funds to purchase the annuity must pass from the defendant or their agent to the annuity company or its agentd. You cannot receive settlement funds first and then purchase a structured settlement annuity yourself after the factd. The annuity must, in fact, be purchased by the defendant or insurance companyd. During the weeks leading up to settlement, a claimant should make sure his or her lawyer is preserving the right to structure any part of the settlement d.
In theory, anyone with a life insurance licence can sell a structured settlement annuityd. Without specialized experience, though, a structured settlement may be improperly executed leaving the claimant with significant tax liabilityd. Structured settlement brokers (of which there are about a dozen in Canada) are well known in the legal profession and insurance communityd. The structured settlement broker will usually prepare all the required documents and help calculate the appropriate structured.
For legal advice about structured settlements, you should consult a lawyerd.
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First of all this list of customer service phone numbers for structured settlement annuity companies for your convenience, because we know how frustrating it can be chase down customer service contacts when you have just a simple task or question.d.
Do you have a structured settlement annuity and want to change a bank account for direct deposit, change a beneficiary, change an address, report a death or lost the contact information for your structured settlement broker? For the convenience of annuitants, attorneys, claimants and owners of structured settlement annuity contracts, the 4structures.com LLC compiled list includes customer service phone numbers for current and former structured settlement annuity companies and is current as of May 9, 2016.d.Please be sure to have your contract number handy when you call.d.
Current Structured Settlement Annuity Company/ Periodic Payment Reinsurance Company
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What If You Have Lost or Misplaced Your Structured Settlement Documents?IMPORTANT NOTICE: If you have sold a portion of your structured settlement payment rights to a settlement purchaser (a/k/a “cash now pusher”) it is possible that the unsold part of your future structured settlement payments are being “serviced” NOT by the annuity issuing life insurance company, but by either (1) the settlement purchaser, (2) a servicing subsidiary of the settlement purchaser or (3) another company, bank of or other financial institution that provides servicing on such transactions.d. aegon structured settlements Structured settlement servicing is necessary primarily because some structured annuity issuing life insurance companies choose not to split annuity payments so the annuitant must transfer ALL of their structured settlement payment rights (i.e.d.even the unsold portion) to a factoring company or servicing entity. When structured settlement payments are subject to a servicing agreement following a sale of structured settlement payments for “cash now”, you must contact the entity that is servicing your annuity payments, not the annuity issuer.d.If you have sold multiple times to different companies you may have more than one servicing company. Investors who have acquired structured settlement payment rights in the structured settlement secondary market should be mindful to determine at the time of purchase, whether they have acquired serviced structured settlement payments and be guided accordingly. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AEGON Structured Settlements
Various structured settlement annuity issuers under the AEGON umbrella no longer write structured settlement annuities.d.Nevertheless structured settlement payees may have a need for service and AEGON has responded with a web page that includes addresses, customer service phone numbers and adobe acrobat versions of the most common customer service forms.d.Click here for a link to the AEGON novation structured settlements customer service web page.
Bravo to AEGON! Hopefully other customer oriented former structured settlement annuity issuers will follow suit.
Isn’t it frustrating is it when a seemingly simple request, such as the need for a form to change a beneficiary or the bank account for your direct deposit, is met with “dunnos”, “turf offs to other people, each seemingly not trained to respond to even basic customer service questions” and the dreaded “voice mail hell”? Your time is valuable, why waste it?
Former Structured Settlement Annuity Issuers under the AEGON Umbrella
Commonwealth Life
Monumental Life Insurance Company
Peoples Security Life
Transamerica Life Insurance Company
Transamerica Life Insurance Company of New York
Transamerica Occidental Life Insurance Company
United States Life in The City of New York: NY Structured Settlements Improvement
by John Darer® CLU ChFC CSSC RSP CLTC
Under a new corporate guarantee for New York structured settlements announced January 17, 2012, AGC Life Insurance Company will guarantee the obligations owed to structured settlement claimants under Qualified Assignments in the State of New York entered into with American General Annuity Services Corporation (AGASC).d.AGC Life Insurance Company is a Missouri-domiciled life insurance company and an intermediate holding corporation and owner of certain major affiliated life insurance companies of AIG.
A copy of the structured settlement guarantee can be found at the following link Download Corporate Guarantee-AGC Life Insurance Company Guarantee of AGASC-specimen
The improvement is a welcome return of American General’s New York structured settlement program to a transactional structure similar to what existed prior to the AIG purchase, when VALIC was its New York underwriting company.d.It also aligns its New York program with its structured settlement program outside of New York.d.Since the AIG acquisition of American General in 2004 and prior to this latest development, the New York program offered no guarantee of the assignment company.
Annuity Issuer: The United States Life Insurance Company in the City of New York (USLife).
Assignment Company: American General Annuity Service Corporation (AGASC)
Corporate Guarantor: AGC Life Insurance Company (AGC Life)
Caveat For Certain Existing Structured Settlement Annuitants
It is unclear whether or not structured settlement annuitants who took structured settlements with American International Life Assurance Company of New York (AILife) AFTER the post bailout restructuring of certain AIG insurance subsidiaries (effective July 1, 2009 as to the structured settlement annuity program), or with United States Life Insurance Company in the City of New York after the merger between it and AILife made it the New York underwriting company, but prior to the January 17, 2012 announcement, will have the benefit of the AGC Life Insurance company guarantee.d.This author contacted an American General company executive for comment and the executive indicated that he would check into it.d.We are also interested in how funded cases that have not yet been issued (e.g.awaiting Court approval) will be treated.
With AILife structured settlements written between 2004 and 2008, the qualified assignee was either American Home Assurance Company, or National Union Fire Insurance Company of Pittsburgh, PA (if an AIG case where American Home Assurance Company was the Defendant’s insurer).d.Both of these entities are insurance companies, which generally cannot file for bankruptcy protection. .d.
In the restructuring following the AIG bailout in 2008, National Union Fire and American Home were segregated under the Chartis umbrella.d.While structured annuities issued by AILife/USLife and American General are eligible in the Chartis structured settlement program, neither of the companies is a Chartis subsidiary.The American General structured settlements retained the AGC Life insurance Company guarantee that existed prior to the AIG acquisition in 2004, but after restructuring, from July 1, 2009, the qualfied assignment company for prospective cases using the New York licensed annuity issuer was the special purpose shell company AGASC (not an insurance company), with no guarantee for New York.d.To be clear, during the same time period the assignee DID have a guarantee where the AGASC funded its obligations using the non-New York licensed American General Life.d.This affected July 1, 2009 to January 16, 2012 issued cases with AILife and later USLife structured settlement annuitants.d.This was seen as a negative by some, which has now been addressed, at least for new USLife structured settlement annuitants.d.
We will let readers know when we hear back on how the annuitants with July 1, 2009 to January 16, 2012 issued cases with AILife (and later USLife) structured settlement annuties will be treated.
Aegon Structured Settlements Morgan
Jim Ahern, Managing Director – Americas Structured Finance Group Jim Baskin, CFA, CPA joined Aegon USA Investment Management, LLC (“AUIM”) stranded cost, structured settlement, whole business, marketplace lending, and solar.d. portfolio manager of JP Morgan’s Structured Investment Vehicle, Whitepine.
The settlement made public on Tuesday … Companies and investors use ISDAfix to price swaps transactions, commercial real estate mortgages and structured debt securities.d.The alleged illegal activity included the …
COUNTERPARTY PAYMENT OBLIGATIONS: The rating on the IBB revenue bonds reflects the structured nature of the prepaid energy … Citizens Gas (CG), and Transamerica Life Insurance Company (AEGON; IDR ‘AA-‘/Negative Outlook).d.WEAK LINK …
Name : Jurisdiction of Incorporation : Percent of Voting Securities Owned : Business.d. AEGON Direct Marketing Services, Inc.d.Taiwan : 100% AEGON DMS Holding B.V.
– 2nd Annual Sunshine Backed Bonds -> Speakers – IMN HomeJim Baskin, CFA, CPA joined Aegon USA Investment Management, LLC (“AUIM”) … Jim is Head of U.S.d.Structured Research where he is responsible for all structured … tobacco settlement, transportation and triple net lease-backed securitizations.Before his role at Standard & Poor’s, Xilun was a senior manager at Morgan …
They agreed to pay a total of $324 million (281 million euros), with JP Morgan covering the biggest chunk of $52 million to be followed by Deutsche Bank, Bank of America, Credit Suisse and RBS paying $50 million …
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(RSL Funding, LLC v.d.Alford (2015) 239 Cal.App.4th 741, 744; Morgan v.d.United Retail Inc.(2010) 186 Cal.App.4th 1136, 1142.) “’Structured settlements are a type of settlement designed to provide certain tax advantages.d.In a typical personal injury …
IMN’s ABS East conference, September 21-23, 2014, Miami.d.Broker dealers, lawyers, special servicers, trustees & rating agencies meet issuers & investors
AEGON Structured Settlements, Inc.d..d.Community Investments VII, LLC (0.01%); J.P.d.Morgan Chase Bank, N.A., a non-AEGON affiliate(99.99%), Investments.
The ING Group (Dutch: ING Groep) is a Dutch multinational banking and financial services ING Bank’s settlement with OFAC is simultaneous with settlements with the US Wholesale Banking …
Multi-million settlement by 7 big banks in interest rate rigging lawsuit – The settlement made public yesterday … Companies and investors use ISDAfix to price swaps transactions, commercial real estate mortgages and structured debt securities.d.The alleged illegal activity included the …
Phone Hours 11:00 am – 3:30 pm, CST Monday through Friday Phone (800) 866- 0002.d.Fax: (888) 560-4860.d.Mail Regular and.d.Overnight Delivery AEGON …
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Taxes On Settlement Money Videos If you receive proceeds from settlement of a lawsuit, … Settlements — Taxability (continued) … Tax Withholding and Estimated Tax, … But, specific portions of your settlement, such as reimbursement for lost wages, may be subject to income tax.d.Before spending your insurance settlement money, … Tax Breaks and Home Ownership.d.… estate taxes included
CQF Client Organisations | CQF – Shell International Trading and Shipping Company Limited.d.SimplicityIT.d.Sina Corporation
ABS Vegas 2016 -> Speakers – IMN – Michael Adams is the global head of structured finance services at TMF Group.d.TMF Group is a leading, independent provider of corporate services, accounting …
Best Pre Settlement Companies Our experience in the financial industry allowed us to collaborate with some of the best companies offering pre-settlement funding.d.By referring your client to J.G.d. … Punjab govt to seek pre-qualifications from foreign companies – The chief minister further directed that advertisements should be published in foreign media for pre-qualification of companies.d.He said that
Approval is subject to the terms of the settlement documents.d.If the settlement documents do not give you this right, your change may not be approved.d.None of …
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