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July 10, 2015

Structured Settlement Payee Asks "Structured Settlement or Assistance?

by John Darer ® CLU ChFC CSSC RSRP CLTC

A June 2015 post by a structured settlement payee on Reddit highlights a financial dilemma in which he contemplates his options. including selling structured settlement. 

The structured settlement annuitant says he " was in a terrible car accident several years ago. (Truck driver who  struck me admitted fault, insurance company was quick to pay out because  it was very obvious their client was at fault.) In order to get the most from the settlement I was advised to accept a structured settlement  that pays out a monthly amount that keeps me comfortable (as far as bills, food, etc) and guaranteed lump sums every 5 years". [ emphasis added]

He goes on "I received a large chunk of the settlement and used it to purchase a home outright, a vehicle,  pay off my medical bills, and pay to put myself through college since I  cannot return to my previous line of work due to my physical disabilities. I paid to have the home inspected, the plumbing inspected,  and the furnace inspected. I thought I was doing everything right and
everything was coming up..(good for) Me."

"I do not qualify for a loan even though I own my house because I have no verifiable income aside from the monthly payout which, as I said, keeps me comfortable but doesn't allow me to save anything (or make payments on the loan, in the eyes of the bank). Until I find work I am broke - except for the structured settlement moneys."  [emphasis added]

"I have been in contact with every structured settlement company I could contact to find out what my options were. I've worked the numbers as much as I could and have about the highest bid I will get from anyone. I will be taking a big hit - I'm essentially buying a little less than 1 dollar for 2 dollars and I'm told this is the best I will get."   [ emphasis added]

"But I REALLY don't want to lose so much money from my structured settlement....Is it better to take a significant hit to cash in part of a structured settlement or try to fall on the mercy of public assistance? Are there any other options besides the standard structured settlement sharks (JG
Wentworth, Peach Tree, Oasis, etc)?"

I think the posts says it all.  The annuitant understands that the amount of cash now for structured settlement sucks. The annuitant was sensible in that he allocated a significant amount of upfront cash and the structured settlement payments to to keep himself comfortable. The annuitant admits that he has "always been poor with money and this  (structured settlement)  keeps him in line, but according to everyone else he made a terrible mistake and now he is terrified they are right".

Read the fill Reddit post and the comment thread here.  By the time I post this you can be sure that some of the less savory denizens of the structured settlement factoring market will be posting trackback links.

This man could have used a settlement planner and someone with Sudden Money or transition expertise at the outset, someone who could have assisted him in managing his cash and wealth orientation.  It's as an easy mark for some cash now pusher to target the structure because that's what they do. It's important for people to learn how to  better manage money and short term and long term debt and to have an emergency fund.  That being said the annuitant does not demonstrate the impulsive characteristics of the "nutritious" low hanging fruit, the figurative seal in the "sharks'" diet.

Posted at 06:06 PM in Settlement Planning, Settlement Planning Issues, Structured Settlement Factoring, Structured Settlement Factoring News, Structured Settlement Help, Structured Settlement Industry News, Structured Settlement Payments, Structured Settlement Transfers, Structured Settlement Watchdog®, Structured Settlements Florida, Structured Settlements in Fort Lauderdale FL, Structured Settlements in Illinois, Structured Settlements in Ithaca New York area, Structured Settlements in Nassau County, NY |

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Guide to Structured Settlements 2023

  • 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 2023 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].
  • Structured Settlement Annuity Companies 2023
    Which life insurance companies issue structured settlement annuities going into 2023? 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.
  • 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) or changed its name and you're trying to track them down, here you go! The list is regularly updated. Last updated September 14, 2023
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    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.
  • iStructure |Uncapped Fixed Index Structured Settlement Annuity
    iStructure is an innovative game changing fixed index structured settlement annuity for plaintiffs or attorneys. with an intermediate to long term horizon

Qualified Settlement Funds

  • What is a Qualified Settlement Fund?
    Qualified Settlement Funds | What You Need to Know
  • 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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