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April 28, 2013

Waack "Off" on Structured Settlements

by Structured Settlement Watchdog

 

Structured settlement social media road kill
Waack Job is This Week's Social Media Road Kill

This week's structured settlement social media "road kill" , "scraped up" near Detroit Michigan, is Travis Waack's effort** to explain "how does a structured settlement annuity work" is woefully uninformed.

 

The structured settlement watchdog will review the errant "Waack job" for your education.

Travis Waack

"With if the recipient of a structured settlement annuity is also a recipient of Medicare or Medicaid, the income from this type of annuity will not impair their ability to continue receiving benefits from these programs"  

In Reality

The structured settlement annuity in and of itself may very well impair a Medicaid recipient's ability to receive Medicaid absent proper settlement planning.  For example, using a structure without a Special Needs Trust will be problematic if the amount of income generated, together with income from other sources, exceeds certain threshold amounts.

Travis Waack

"These products are designed to make regular payments to their holders for a set period of time in specific intervals. In many cases, annuities also have a death benefit option whereby if the holder of that annuity were to pass away prior to receiving their funds, then the remainder of the money would be paid out to a stated beneficiary".

In Reality

  • Payments are made to payees, not the holders. The owner/holder of the structured settlement annuity contact is typically an assignment company (qualified or non qualified depending on the nature of damages).
  • The payee of an annuity could be said to be the "holder" of "structured settlement payment rights"
  • Payments maybe made for a set period of time or for life. There are other types of structured settlement payments 
  • One again, "the holder" of the annuity is the assignment company. The assignment company does not "pass away". If the payee, is a natural person and the payee passes away, any remaining certain payments or guaranteed lump sums can be paid to their named beneficiary. There are other possibilities such as where the measuring life is a naturalperson but the payee is a trust. The terms of the settlement agreement will dictate the ability to change beneficiaries.

Travis Waack

 With a deferred annuity, the holder will wait until a specified period of time in the future before taking receipt of their funds. The money that remains in the annuity account is sheltered from taxes until it is withdrawn.

In Reality

  • A properly designed structured settlement will avoid constructive receipt.
  • Structured settlement payments which represent damages for physical injury, physical sickness wrongful death or workers compensation are generally income tax free [see IRC 104 regarding exclusion for the elements of damages]
  • Structured settlement payments are not withdrawals.

Travis Waack

"The components of a structured settlement annuity can include:

  • The structured settlement agreement
  • An annuity application
  • A court order (only if a claim is being made by a minor)
  • An annuity policy"

In Reality

  • The components of a structured settlement annuity include the annuity contract and the application.
  •  A court order is not required for every structured settlement annuity. A court order is required to approve the settlement where plaintiffs or distributees are minors or incompetents.
  • Other documentation, such as a settlement agreement and release and qualified assignment are important documents in the structured settlement process, but such documentation is not a component of the structured settlement annuity.

 

Travis Waack

"When a structured settlement annuity is in place, the insurance company that is offering the annuity contract will calculate the amount of the regular income payments to the recipient"

In Reality

Waack is really off here!  The amount and timing of the structured settlement annuity payments is determined BEFORE the structured settlement annuity is in place.

**at the time of posting the subject post was live at www.americanpremiumfinance (dot)com/annuities/structured-settlement-annuity-work and linked to Travis Waack's Google Plus profile.

Structured Settlement Social Media "Road Kill"  is an ongoing "weed whacking" journey through some of the worst writing about structured settlements on the internet.   American consumers of structured settlements need to be properly informed. Those who churn out poorly written inaccurate content because they are too lazy to seek out readily available information that IS accurate,  do no service to the American consumer.

 

Posted at 11:22 AM in Detroit Michigan Structured Settlements, Dumbest Things Said About Structured Settlements Series, Social Media "Road Kill", Structured Settlement Humor, Structured Settlement Watchdog® |

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Guide to Structured Settlements 2022

  • What is a Structured Settlement? What You Need to Know
    What you need to know about structured settlements. General explanation of structured settlements, including the stable guaranteed income and favorable tax benefits that give structured settlements their "juice" and a helpful introductory video featuring 2022 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 | Structured Settlement Diagram
    How structured settlements work, including 4structures.com LLC's super helpful structured settlement flow chart/diagram showing how structured settlements fit in with other settlement planning solutions.
  • Rated Ages and Structured Settlement Cost
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  • Structured Settlement Annuity Companies 2022
    Which life insurance companies issue structured settlement annuities going into 2022? 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.
  • 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.
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    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
    Ways You Can Structure Your Settlement Payments. 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 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 the an index linked structured settlement where payments are adjusted based on upside changes in the S&P 500 with no downside and a cap of 5%. 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.
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  • 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.
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