Structured Settlements 4Real™ Blog: Structured Settlements | Settlement Planning News and Commentary

Levi Johnston's "Tripp-ing Out", But Can Actually Teach You Something Useful About Saving | Wasteful Dissipation

Levi Johnston, best known for putting a "bun" in Bristol Palin's "oven" and milking his 15 minutes of "fame" into a book, a reality show (and whatever else) for over $1 million, can actually teach young adults something useful- about financial planning and settlement planning. I'll get to that in a minute.

At age 22, Levi Johnston has purportedly squandered the over $1 million he earned on "guns, boats and four wheelers" and is purportedly behind $38,000 in child support for his son Tripp, at the same time he is set to become a father in an unplanned pregnancy for the second time. He falls squarely into the time frame of that much ballyhooed "hunch-statistic" that 90% of people dissipate a lump sum within 5 years. According to US weekly and syndicated reports in newspapers all over the world, such as the UK's Daily Mail, Levi Johnston has moved back home with his mother and is penniless from rampant spending. I sincerely hope Levi Johnston can "man up" and get control of his life and be a warning beacon to others.

Where a personal injury case is settled by a young adult, on behalf of a minor, or a minor is the recipient of a settlement from a wrongful death lawsuit, a discussion often ensues over the best settlement planning strategy for them. I've seen some parents who want to have their children receive a huge lump sum at age 18 and cautioned against it. Why leave a natural tendency to be impetuous to chance? Being impetuous now can lead to regrets and depression later as the individual matures and comes to the realization of what he or she has lost. This sense of loss is even more acute on wrongful death cases . I've seen it with a 9-11 survivor.

A well crafted settlement plan, which often includes a structured settlement is one way manage dissipation risk

 

Customer Service Phone Numbers For Structured Settlement Companies

Trying to contact a structured settlement company to change an address, but don;t know the telephone number. Well 4structures.com can help!

The 4structures.com website has a comprehensive list of both current AND former structured settlement annuity companies. 

Go to 4structures.com to find the structured settlement customer service number now

Please note:

If you are the parent or guardian of a child who over 18 years old, the structured annuity company may require that your child or ward contact the company for privacy reasons.

Certain requests, like a change of beneficiary or bank account, will require a change request in writing and may even require a notarized signature for your protection. 

If you (or your child, if applicable) has moved since the structured settlement was set up and neither of you has a GPS chip implanted in you, then you've got to let the company know about it if you want to receive your payments on time. It is generally the  obligation of the payee of the structured settlement to notify the annuity issuer of any change of address or bank account (if direct deposit applies).  We receive quite a few calls from annuitants from all around the company who see our website and contact us for help in determining why they haven't received a payment. The majority of cases involve a failure to notify the insurer of a change of address.

If you have sold some structured settlement payment rights in the past it is possible that you may have to contact the company that is servicing your structured settlement payments. This is unfortunately necessary because many life insurers will not dice* payments between two places necessitating that you transfer all of the payments and then the servicer dices the payments. It may take some detective work to determine who to call, It may be helpful to check the closing paperwork from the structured settlement sale transaction.

* e.g. You are due $2,000 per month for 10 years and you sell the rights to $750 per month of those payments for 10 years

 

 

Judges and Structured Settlement Payouts Beyond Age 18: A Disturbing Trend?

A judge in Florida and a judge in New Jersey did not approve a structured settlement past the age of 18 even when this long prudent financial solution was desired by the guardians. Is more judicial education needed, or is this the beginning of a disturbing trend that needs fixing? Registered Settlement Planner and structured settlement expert John Darer frames the issue and discusses the wisdom of giving large sums to young adults before they have become financially mature.

    

 

Does Factoring Make Structured Settlements Better? Perhaps in This Instance

Should they or should they not get a big pile of cash at age 18, that is the question?  Some surrogate judges think they should, even if parents or the infant plaintiff's lawyer might not, citing case law in their states, which suggests that the child have access at age 18. This may lead to a settlement distribution (or if a structure is a approved, a structured settlement payment design) that is not prudent.

Consider a case in which the child's parent or parents have died, leaving young children. In reviewing structured settlement proposals that for example, could provide for annual payments to pay for college tuition from age 18-22, a judge could reject the plan on the basis of the case law and give an 18 year old already dealing with the sequelae from the loss of parents, who may not be mature enough to make the correct financial decision. Alternatively, the 18 year old may exhibit sudden money syndrome characteristics. This could lead to financial decisions that he or she may come to regret later on in life when they realize that they would have more than the few little baubles they have left if only there had been better decisions to begin with.

Sometimes the teenagers or young adults don't realize what the money means (compensation for lost parental relationship and support) when they're spending it. At least a structured settlement that includes a reasonable spreadout of payments (for college or other purposes) gives someone the time to learn from their mistakes without the risk of obliterating their blood money.

Someone I know contacted me in 2010 because he had gone through his up front cash obtained as an 18 year old as part of the recovery for the loss of his father on 9/11.  Unfortunately, money that was intended to be used for college was instead lost in the stock market.  Fortunately he had options because he structured  a large portion of the recovery.

Back to the access at age 18 question...the fact is that there IS already access to a structured settlement at age 18 by virtue of the ability to factor the structured settlement? 

Indeed at least one state Court has recognized the ability to sell annuity payments (and the facility to sell them) in denying Medicaid payments. See Estate of Pladson v. Traill Co. Social Services, 2005 ND 213, 707 N.W.2d 473  "While the annuity, by its terms, cannot be assigned, there is nothing in law to prevent Ms. Pladson from contracting to sell the payments she receives under the annuity.

There is an active market for the sale and purchase of such "streams of income," referred to as the factoring transaction market. In this market, sales and purchases are made of streams of income resulting from instruments such as structured settlement agreements, mortgage payments, lottery or casino winnings, estates, trusts, and annuities. I have enclosed, for your information, copies of printouts from websites for companies that purchase such streams of income, providing the individual with lump sum cash payments immediately".

Please note that while the Pladson case did not involve a structured settlement it illustrates that there is liquidity, if necessary.

That being said the transfer of structured settlement payment rights for cash requires Court approval to determine if such transfer is in the best interest of the person selling  (and, if applicable their dependents). Therefore I submit to you that structured settlements offer the best of both worlds. One CAN achieve spendthrift protection and still have access at age 18, if necessary.

More information on Structured Settlements and Settlement Planning for Children and Minors

 

 

 

 

"Prepare For a Future... If You're Not Careful Everything Can Disappear"

Former Orlando Magic star David Vaughn 36, appears on NBA Fanhouse in a story that describes a journey that stretches at its peak from accommodations at the Ritz Carlton to the 2008 nadir of "accommodations" in a friend's dusty storage shed or the back seat of his Chevy Impala. Vaughn is 6 foot 9 and weighs 250lbs.

It is a story of dissipation that should resonate not only with current and aspiring young athletes but teenagers and young adults who receive recoveries from a lawsuit involving their own personal injury, or from the death of a loved one.

Key points from the NBA Fanhouse article "NBA Washout David Vaughn Back From Depths of Despair"

1. "His original three-year guaranteed contract with the Magic didn't come with any guarantees of a successful life. The contract didn't come with a course in life management skills, and he had none when his basketball career finished"
2. "I went from the pinnacle of having it all, to the pits of having absolutely nothing, and seeing no light at the end of the tunnel,''
3. "It's a lot harder to get out of big-time professional sports than it is to get into it.' You get sucked into that lifestyle, and there's no easy way out.''-Kyle Rote, Jr., former NASL soccer star and former agent of Vaughn's
4. He thinks back to the '90s when he played in the NBA, living large and acting wild like a child with too many quarters in an arcade.

At least Vaughn's story has an ending that is happier than its beginning. I also hope that the epilogue is better for him and his family.

Yet stories like Vaughn's fuel the incentive to go after " financial crack dealers" like Structured Asset Funding, those that act like them, and those that support them.  Structured Asset Funding solicits business from tort victims by tempting them with dreams of $100,000 sports cars and boats as a reason to sell structured settlement payment rights.

Guaranteed income solutions that may help (together with counseling)

Structured celebrity endorsement fees are one solution for athletes and other celebrities to help secure their futures.

A Structured settlement is a financial planning solution that helps those who have suffered a personal injury or lost a loved one due to an accident. It offers a certain amount of spendthrift protection, tax benefits and can be funded either with a structured settlement annuity or via obligations of the United States government (often through a combination of Treasury Inflation Protections Securities called "TIPS" and Zero Coupon STRIPS)

For more information contact John D. Darer toll-free at 888-325-8640

FOOTNOTE: The "Dissipation Myth" manure spreaders may wish to note that the article states that Vaughn's basketball career ended in 2003 and the nadir came in 2008. My math says that it's 5 years, how about yours?

Student Loan Debt Questions for 19-26 Year Olds, Alternatives to "Cash Now"

Are you 19-26 years old with a structured settlement that was set up when you were a child and now have mountains of student loan debt?

Are you the parent of a 19-26 years old with a structured settlement that was set up when your child was a minor and now he or she has mountains of student loan debt?

Have you been approached by a company to sell your structured settlement to help you pay off the debt?

Have you been up late at night and thought about contacting J.G. Wentworth, Woodbridge Investments, Peachtree Settlement Funding, Imperial Structured Settlements or Stone Street Capital?

If you are struggling with student loan debt, are you aware that there are viable alternatives to getting into bed with any of these "cash now" pushers?

1. Defer or forbearance – you may be able to delay making payments up to six years due to unemployment or other economic hardships.  In some cases, the government will continue making your interest payments, but in others, any interest can be added to the loan balance.

 

2. Extending the term – you can lower you monthly loan payments significantly by going say from a ten to twenty year term calculation, but recognize that you'll be paying a lot more interest overall.

 

3. Alternate Repayment – beginning July 1, those with federal student loans will be able to participate in the "income-based repayment program," which limits payment amounts based on your income, and may even allow you to write off substantial parts of the loan principal.

Source: New York Times

 

Got Structured Settlement? Don't Blow It!

You just turned 18 and you find out you have this structured settlement that your parents set up for you years ago. The structured settlement provides annual payments tied to what are meant to be your college years.

Now, like the Sirens of ancient Greek mythology, the fat J.G. Wentworth Viking chick is calling to you, people are falling all over themselves to offer you trinkets in exchange for your structured settlement. These people are a dime a dozen pushing the "cash now" drug. Don't you think it makes sense that it's something valuable if these companies are being so aggressive about getting to you?

But man, it's so tempting isn't it? You can just smell the cash and what it can do for you, the car you can buy, the boat, the tennis bracelet for your girlfriend, the new closet you'll need for your new collection of Jimmy Choos, all those people you THINK you will impress. Perhaps the fat Viking chick or Mr. Wentworth in his conductor suit even turns you on. Be honest now!

Then, hopefully, you think again and realize that it's not all about instant gratification AND, if you play your cards right you will eventually be able to afford all of that (if you wish), without destroying the opportunities for the future that a college education offers.

Sandra Block's  "Your Money" column in Tuesday's  USA Today presented the results of a Sallie Mae/Gallup Poll on how the average family pays for college

Parent income/savings 32%
Student Borrowing 23%
Parent Borrowing  16%
Grants/scholarships 15%
Student Income/Savings 10%
Friends/Relatives Support 3%

This means that on the average, mom and pop can't afford to send you to school of your choice on their own. Your structured settlement payments can help afford you that opportunity. Don't blow it!

"From your parents you learn love and laughter and how to put one foot before the other. But when books are opened you discover you have wings". – Helen Hayes

Weathering Tough Financial Times-The Long Term Costs of Quick Cash

“Rising fuel and food prices, declines in the housing market, volatility in the financial markets, an ever-tightening credit crunch...– they’re all creating unexpected financial challenges for many Americans,  But tough financial times don’t necessarily justify resorting to risky ways to make ends meet.”
Mary Schapiro CEO Financial Industry Regulatory Authority ("FINRA")

Weathering Tough Financial Times-The Long Term Costs of Quick Cash was published by FINRA on June 26, 2008 as part of its series of investor alerts. Take some time to read it so that you understand the nature of the concern and that concerns have escalated to the regulatory level.

FINRA is the largest non-governmental regulator for all securities firms doing business in the United States.

Some key points and comments

1. Among the trends which FINRA identifies as troubling include investors "leveraging or prematurely depleting their retirement savings (through loans and 401K debit cards), trading in their insurance policies in transactions known as "life settlements," and tapping their home equity through reverse mortgages". FINRA states that "the hitch is that these early retirement strategies sometimes assume unrealistically high rates of return on the recommended investments and require imprudent rates of withdrawal each year".
2. One could easily add the transfer or sale of structured settlement payment rights to the list,  particularly if the impetus for the sale is sleazy advertising practice, or the transfer or sale of structured settlement payment rights is being sold by the promoter to buy a depreciating asset or as part of a "early retirement strategy".

FINRA's conclusion is that weathering rough economic times can prove challenging for many investors. But staying the course nearly always pays off in the long run—and that means taking a long-term approach to investing and making sure you maintain a diversified portfolio that spreads your risk of losses. If strapped for cash, be sure to carefully consider the long-term consequences of quick cash, especially the tax implications of your decisions and the potential for losing a significant asset.

Joe Jamail on Structured Settlements

Click below for words of wisdom on structured settlements from famed Houston, Texas trial lawyer Joe Jamail

Joe Jamail Biography (click title)

Interview took place during the NSSTA Winter Regional Meeting Austin, Texas January 2008

"I am so thankful that I have that guaranteed income coming in on a monthly basis"

"Thanks so much for your help throughout this process.  Things are going well with the way things were set up with the last settlement, and given the current financial crisis that seems to be hitting everyone so hard, I am so thankful that I have that guaranteed income coming in on a monthly basis." 

With some factoring industry morons soliciting  and attempting to take advantage of the lowest common denominator by mischaracterizing and suggesting misleadingly that "you trade your teensy weensy payments for one giant lump sum", it's appropriate to highlight a response I received from an educated structured settlement recipient.