by Structured Settlement Watchdog®
Einstein Structured Funding, a "website company " created by the reprehensible folks from JRR Funding in Owings Mills MD, who along with Annuity Sold and other affiliates, were recently banned from doing business in Maryland for 7 years, continues to demonstrate a high level of ignorance. despite the fraudsters' claims of being geniuses.
Despite strong endorsements for structured settlements by the American Association of Persons With Disabilities, members of Congress, numerous lawyers representing plaintiffs, Einstein claims "a settlement is often a great deal for an insurer or a large corporation, but it is often a very lousy deal for working people talked into signing one by the insurance company’s lawyers.
Einstein Structured Funding Mispresents
"Unfortunately, insurance companies are trying to limit the ability to sell structured settlement annuities. Some structured settlement agreements now come with a clause that prevents the sale of the annuity. Others may require permission from a judge before the agreement is sold".
The Truth: The sale of structured settlement payment rights is primarily governed by State Law. Judicial approval is a requirement of structured settlement protection acts to protect people from fraudsters like those behind Einstein Structured Funding and Annuity Sold. Federal law comes into play as well through the imposition of a 40% excise tax if the rules are not followed.
Einstein Structured Funding Ignorance
"The aspects of such a settlement that make it a good deal for the insurer are what can make it a very bad deal for a defendant. In a structured settlement, a defendant does not receive a sum of cash. Instead, he or she receives a payment arrangement called an annuity".
The Truth: The Defendant is the paying party not the receiving party. Payment is made in exchange for a release. The Defendant does not receive an annuity.
Einstein Structured Funding Misrepresents
The cost of a structured settlement annuity, even one that is theoretically worth a several hundred thousand dollars, will usually be a fraction of that of a cash settlement. The annuity is actually an investment; much of the money that will be paid out will be generated by interest that is similar to bank interest or by a stock market index.
The Truth: More often than not an allocation to a structure is made once the settlement funding amount is known. It is 100% of the amount allocated to structure, inclusive of any applicable qualified assignment fees. Bank interest is not tax exempt like the payments from a structured settlement that represent damages excluded under IRC 104(a)(2), 104(a)(1) or 139F.
Einstein Structured Funding Misrepresents and Generalizes "A Poor Deal for Average People"
An annuity can be a poor deal for average people because the size of the payments is often limited. A $150,000 structured settlement annuity may only provide an accident victim with payments of $700 a month. That provides an income of $8,400 a year, which is well below the federal poverty line for individuals. The U.S. Department of Health and Human Services currently sets the poverty line at $11,170 for an individual.
The Truth: I don't know where these nutters get their numbers. With Pacific Life book rates, on January 26, 2018, a plaintiff can produce $700 per month for 15 years income tax free and still have close to $42,000 in cash when allocating from $150,000. The plaintiff can also choose to receive $700 per month for 10 years and still have close more than $72,000 in cash. Or if you take an "average" 60 year old, a structured settlement could begin paying an income at age 62 and continue to age 70 so that the "average" person does not have to take Social Security at age 62 and can get more than 60% more annual income from Social Security starting at age 70.
Einstein Structured Settlements Misrepresents
Structured settlements generally don’t provide families with enough money to live on.
The Truth: There are structured settlements that provide hundreds of thousands in annual tax free income. If people sell their structured settlements to companies like Annuity Sold they will never, ever get full value for money.
Einstein Structured Settlements Misrepresents
Many people that sign up for structured settlements end up regretting it at the end of the day. They find themselves stuck with regular payments that make little or no difference to their income level.
The Truth: What Einstein misrepresents is in direct conflict with what the structured settlement secondary market leaders have said and published. It runs in direct conflict with statistics about the percentage of people who sell structured settlement payment rights.
Einstein Structured Settlements Misrepresents
Many investors, such as wealthy professionals, buy after-market annuities because they can provide a source of additional income that is guaranteed by a large insurance company.
The Truth: If wealthy investors are interested in buying structured settlement payment rights which Einstein has misrepresented as annuities then it undermines Einstein's argument that structured settlements are a bad investment.
Einstein Structured Funding Misrepresents How Factors Help Working Families Get out of Structured Settlements
That’s where a professional called a factor comes in. A factor, or factoring company, specializes in purchasing such annuities and reselling them to brokers or investors.
The Truth: A factor or factoring company does not buy structured settlement annuities or resell structured settlement annuities to investors. This is the one of the biggest ongoing advertising frauds perpetuated by certain members of the structured settlement factoring industry. As set forth in the Internal Revenue Code there is a sale or transfer of structured settlement payment rights, (which are then resold to investors as structured settlement derivatives which are scam labeled annuities by merchants of the derivatives. The annuity remains intact and is not sold. A scam labeled secondary market annuity is not an annuity
Einstein Structured Funding Massive Ignorance and Misrepresentation
Some structured annuities contain a loophole called lifetime contingent payments. That means the annuity payments stop if the defendant dies. The defendant cannot leave the annuity to her children or grandchildren.
The Truth: There are endless studies which show one of the greatest fears is running out of money before you die. When you buy an income annuity or accept a structured settlement with lifetime payments, you do so for the safety and peace of mind that payments continue for as long as you live, whether that be 75, 80, 90, 100 or more, regardless of whether bitcoin drops 20% in one day. Generally lifetime annuities include a certain period, which could be as long as 50 years (depending on the company) and provides contractual certainty that a certain number of payments will be paid whether or not the measuring life is living. The Einstein blockheads are "at sixes and sevens" regarding the definition of defendant. The momentary comic relief dissipates fast when you realize the danger that Einstein's ignorance poses to consumers.
Einstein Structured Funding Massive Misrepresentation About Structured Settlement Protection Acts
Unfortunately, insurance companies are trying to limit the ability to sell structured settlement annuities. Some structured settlement agreements now come with a clause that prevents the sale of the annuity. Others may require permission from a judge before the agreement is sold.
The Truth: The Structured Settlement Protection Acts are a collaboration between the structured settlement primary and secondary market, a fundamental part of which is the requirement that a approval of the sale of structured settlement payment rights by a judge is mandatory. The states laws are voted in by State legislature. IRC 5681 the Federal law that imposes an excise tax on settlement purchasers if they dont comply was voted into law in 2001 by Congress as part of the Victims of Terrorism Tax Relief Act.
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