Structured settlements expert John Darer reviews the latest structured settlements news and information and provides expert opinion and commentary, including settlement planning issues/ ideas for settlement management, incisive Structured Settlement Watchdog® commentary that may be helpful to lawyers, plaintiffs, claims adjusters, judges, the news media, sellers and buyers of structured settlement receivables,and interested others. The style is spicy, informative, irreverent and effective. The most prolific structured settlements blog, Now in 20th Year! Check back daily for something new.
Colorado Springs attorney Jim Flynn's "Structured Settlement Not always Best Option" is a "Rocky Mountain Oyster". Flynn, who runs a column in The Gazette called Money and The Law lists fly fishing as a hobby but had to know his present value "fish" doesn't fly.
First he suggests that an insurance company "will offer you a choice of $500,000 immediately or $6,000 a month for 100 months. Your initial thought might be: “Well, let’s see. $600,000 is more than $500,000. So that must be the better deal.” He goes on to say...
"In the example given above, let’s assume a reasonable interest rate for a conservative investment lasting 100 months is 5 percent. Using that interest rate, the “present value” of $6,000 a month paid every month for 100 months is $489,871 — meaning the offer of an immediate $500,000 is, at least at first glance, the better offer. There are lots of other considerations that go into a “which is better” analysis, but purely from a time-value-of-money point of view, a larger amount paid over time may not be the best choice".
Comments:
1. In my opinion Flynn's explanation of present value either highlights how easy it is to manipulate discount rates to confuse those who are unfamiliar with financial calculations or how even an attorney can be befuddled by such calculations.
2. Flynn uses 5% for his example of a reasonable interest rate for a conservative investment lasting 100 months even though 100 months, at 8 years and 4 months is probably a candidate for a discount rate of 2.46%, the rate on the 7 year United States Treasury on May 23, 2011. If that rate were used the present value of the $6,000 per month for 100 months is $543,665.36
3. But then Flynn also ignores the taxation of interest. Let's just shave off 15% for taxes to be ridiculously fair. Thus 85% of 2.46% is 2.091% If that rate were used the present value of the $6,000 pe rmonth for 100 months is $551,562.72
4. Let's fly cast a few more if say we were to use Flynn's "thumb in the wind" discount rate as "bait"... here's what we "catch"
15% bracket PV
$507,831.54
28% bracket PV
$520,387.44
5. Then Flynn goes off on a tangent and talks about time value of money and factoring.
Flynn's writing style in this article is more typical of a pay per post writer rather than a money or legal expert. He should have researched his subject better, articulated it like the lawyer he is and been more comprehensive instead of cramming so much disparate crap in his work like a bear getting ready to hibernate.
I'm done.
But Peter Arnold, Number 2, (you can call him #2) for the NSSTA has come out swinging with the oddly titled "Rocky Mountain High" but well written watchdog piece that might be more aptly titled ""Huckleberry Flynn by Tom Lawyer". The structured settlement watchdog is proud of Peter Arnold for joining the "Charge of the Right Brigade". Peter, this song's for you...
What is a Structured Settlement? What You Need to Know Structured settlements and what you need to know about them including a helpful introductory video featuring A.M. Best Client Recommended Structured Settlement Expert and Registered Settlement Planner John Darer of 4structures.com LLC
How Do Structured Settlements Work? How Structured Settlements Work How structured settlements work, including 4structures.com LLC's super helpful structured settlement flow chart/diagram showing how structured settlements fit in on the spectrum of settlement planning solutions.
Rated Ages and Structured Settlement Cost Rated Ages for Structured Settlement Annuities present advantages to all parties. Shift the mortality risk to a life insurance company whose business it it is to assess mortality risk to price its life insurance and annuities. Rated ages boost your structured settlement annuity benefit per premium dollar, or your yield on lifetime payments. Rated ages help to reduce the cost of funding a Medicare Set Aside arrangement where a Structured MSA, is being used { WCMSA LMSA or NFMSA].
Top Structured Settlement Annuity Companies 2024 Which life insurance companies issue structured settlement annuities in 2024? A list of current structured annuity issuers, the location of their home offices and their financial ratings from A.M. Best, Moodys, Fitch, Standard & Poors and/or other Tier1 NAIC ratings, with links to their websites and other useful information. Last updated June 14, 2024
Treasury Funded Structured Settlements Treasury Funded Structured Settlements are a settlement option for the most conservative using the OTHER permissible qualified funding asset under IRC 130(d), United States Treasury Bonds in addition to, or instead of, structured settlement annuities. Treasury Funded Structured Settlements can also be used to fund installment sales, also known as structured sales and other non qualified structured settlements.
Compare Structured Settlement IRR to Other Settlement Alternatives Use the Taxable Equivalent Yield chart to help compare the Internal Rate of Return (IRR) of a structured settlement to other alternative or complementary investments. Need help with the chart? Call 4structures.com® LLC at 888-325-8640
Structured Settlement Payments | Types of Structured Settlements 2024 Ways You Can Structure Your Settlement Payments in 2024. With a structured settlement you can have more than one type of payment in a single contract. Different types of structured settlement payments can be customized and combined to meet your needs on a stand-alone basis, or in conjunction with other financial products. Diversify your structured settlement, if you wish, by funding with more than one annuity issuer, with treasury funded structured settlements, index linked structured settlement payments and market based structured .
Structured Attorney Fees for Tax Deferral for Attorney Contingency Fees Structured attorney fees is a financial strategy that offers a unique way to defer taxes for lawyers and law firms. Lawyers CAN structure their legal fees even if the plaintiff doesn't structure their settlement. There are multiple ways to structure your attorney fees, such as capped or uncapped index linked structured settlement annuities where payments are adjusted based on upside changes in the S&P 500 or another index, Trial Lawyers may also use a special deferred pay/deferred compensation arrangement, if market based returns returns are desired with no cap. Plan NOW for year end! Put structured attorney fee expert John Darer® on your settlement planning team in 2024.
Structured Settlement Annuity Company Customer Service Phone Numbers Receiving structured settlement payments from your own structured settlement or inherited structured settlement? You'll like this huge time saver. Click the title for a link to a comprehensive list of customer service telephone numbers that includes both current AND former structured settlement annuity issuers and reinsurers. If you have simple bank or beneficiary changes, or if the insurance company that issued the structured annuity has merged, sold or spun off its block of structured annuity business (e.g. Aviva, Allstate, Transamerica, AEGON, GE Capital, Liberty, CNA, Confederation Life), oran annuity issuer has changed its name and you're trying to track them down. Here you go! The list is regularly updated. Last updated May 20, 2024.
Structured Settlement Quote Lock-Ins | What You Need To Know What does a Structured Settlement Lock-In Mean? How do plaintiffs, defendants and insurers benefit from a structured settlement quote lock in when finalizing a settlement? How does the defendant/insurer/court benefit from using a structured settlement lock-in? Where to be careful when using structured settlement lock ins.
What Are Structured Settlement Annuities? Structured settlement annuities are annuities that can provide one or more customized annuity payment streams in a single contract. Read about structured settlement annuities here.
History of Structured Settlements Tracing the roots of structured settlements history from 1918, when Congress exempted damages for personal injury or sickness from income tax, to the establishment of structured settlements as a core personal injury settlement planning tool to the present day.
What Are Market Based Structured Settlements? Market based structured settlements are an alternative or supplementary structured settlement solution for the plaintiff, attorney or law firm that:
1. Can afford to take some market risk
2. Have discretionary settlement dollars.
Claimants and attorneys alike may find that market-based structured settlements provide the opportunity to receive tax-free income, or tax-deferred income, while enjoying growth potential.
Structured Settlements and Longevity Risk| What Are the Odds? Do your financial resources give you enough road, or will the road run out before you do? A structured settlement annuity helps mitigate the risk of outliving your savings, no matter how long you live. A structured settlement can include one or more customized payment streams and types.
Firmwide Qualified Settlement Funds Debunked Firmwide qualified settlement funds have been heavily promoted to trial lawyers, but have been debunked in a detailed analysis in a July 2022 legal opinion a tax partner at the law firm of Faegre Drinker Biddle & Reath, LLP. Trial lawyers and firms who have established Firmwide QSFs or coinsidering establishing a Firmwide QSF should read the analysis as part of their evaluation.
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with a stable readership that seeks credible structured settlement information, John Darer Reviews, commentary and/or opinion about topical issues related to settlement planning, targeted to lawyers, injured persons and their family members, guardians, survivors, judges, magistrates, special masters, mediators, administrators, trust companies, insurance company executives and adjusters, financial advisers, settlement professionals, financial professionals, insurance regulators, government leaders, federal and state law enforcement, buyers and sellers of structured settlement payment rights, the news media and other interested parties.
4structures.com LLC established this structured settlement blog in 2005. John Darer ®, CLU ChFC MSSC CeFT® RSP CLTC, President of 4structures.com, located in Stamford, CT 06902. John Darer is an experienced New York City area structured settlement expert, structured settlement broker, Certified Financial Transitionist, and Registered Settlement Planner. He holds insurance licenses in 45 states, has 41 years financial services experience and 31 years in the structured settlements and settlement planning space.
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Last updated July 10, 2024
New York City Structured Settlement Experts Bridge building settlement consultants who collaborate with clients using a humanistic process, providing creative and reliable advice and support for litigating parties and their lawyers with matters in Courts throughout the New York City metropolitan area
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New York Settlement Planning Expert for NY Attorneys and Residents - YouTube New York settlement expert John Darer's comprehensive approach to Settlement Planning helps New York personal injury lawyers and their clients move through the financial transition resulting from a major life event. CPLR Articles 50A and 50B expertise for New York lawyers
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New York General Obligations Law §5-1702 The New York Structured Settlement Protection Act imposes mandatory requirements on the defendant or the defendant's legal representative when a structured settlement is created (as part of the resolution of a case)
Structured Settlements v Structured Judgments Often confused by writers on the Internet, but there IS a difference between structured settlements and structured judgments under CPLR Articles 50A or 50B. Find out more...
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Structured Settlement Best Practices Corner
New York Insurance Advertising law requires the full name of the Insurer to be listed along with the city and state of the principal office. Stating that you represent these fine companies using Insurance company logos without the preceding information are also illegal
When it comes to settlement documents it is the ultimate responsibility of the lawyers or claims adjusters who receive input concerning the structured settlement aspects of the documents to actually read the entire document, exercise independent thought and advise their clients properly
Be aware that financial advisors use of testimonials is prohibited or restricted
Most states require that Testimonials represent the CURRENT opinion of the person who made the testimonial. Be prepared to back it up.
Number of States That Prohibit Payment of QSF expenses by licensed agents and brokers
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Why Take a Structured Settlement?
A structured settlement offers guaranteed financial security to personal injury victims, wrongful death survivors and their families. A structured settlement involves a customized stream of payments, provides long-term stable tax-free income, for a period of years or a lifetime. Unlike other income annuities. a structured settlement annuity can have multiple payment streams to address multiple needs in a single contract.
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