by Structured Settlement Watchdog
Another example of structured settlement payment buyers targeting and exploiting young adults.
N.D., a 19 year old resident of Florida is scheduled to sell the majority of her Prudential structured settlement to a Delaware structured settlement factoring company with ALOT of fat left on the table, possibly in the hundreds of thousands. The transfer hearing is set for late March 2019.
What's on the "Meat Wagon"?
Monthly payments of $1,000.00 commencing on 01/16/2020 through and including 06/16/2021; Monthly payments of $1,500.00 commencing on 07/16/2021 through and including 06/16/2024; Monthly payments of $7,197.83 commencing on 07/16/2024 through and including 06/16/2063 with a 3% increase every July 16th; Lump sum payment of $40,000.00 due on 07/16/2020.
That's a total of $6,351,156.88 in income tax free payments sold for $1,252,30.91. The factoring company uses a 3.4% discount rate to come up with a present value of $2,670,420.76, so the young lady gets less than 50% of the present value. As a point of reference the 30 year bond 52 weeks range was from 2.887-3.465 (Source: Market Watch) at time of posting.
Prudential has been in business for over 140 years! Assuming the annuitant is insurable, hedging the mortality risk on a 19 year old would cost bupkis.
The transfer petition was filed in Orange County by factoring company, registered in Delaware, bearing an effective discount rate of 7.2% in its New Jersey Mandatory Disclosure (NJ disclosure required because one of the parties, Prudential, is domiciled in NJ).
One Solution for the Excess Fat in the Orlando deal
Prudential has been in business for over 140 years!
Given that N.D, is a from the Orlando area one wonders which settlement planner advised plaintiffs when the structured settlement was established and whether they might be interested in what is going on.
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