by Structured Settlement Watchdog
Anybody can call themselves an annuity expert, but the ones that do so without the requisite experience and credentials are frauds. AnnuityExpertAdvice.com fails even the basic test of knowledge about structured settlement annuities so it is not an expert as I showed in my prior post and supplement below
1. What insurance companies sell structured settlement annuities?
AEA inaccurately claims that USB Financial is an insurance company that sells structured settlement annuities at the right speaks for itself. UBS Financial is not an insurance company. either.
See the insurance companies that sell structured settlement annuities and their ratings.
2. Why Must Structured Settlements be court approved?
Mired in confusion, here's what AEA says "The Federal Periodic Payment Settlement Act of 1982 made it mandatory for court approval on all sales of structured settlements to ensure the consumer’s best interest is put first, and limit any sort of party from taking advantage of the settlement recipient".
A. Not all settlements must be court approved, therefore it follows that not all structured settlements must be court approved. Settlements involving minors, or adults with brain injuries are examples where court approval of settlement is necessary.
B. The Periodic Payment Settlemenmt Act of 1982 did not mandate court approval of all sales of structured settlements. The first line in the bill is a dead giveaway, "Exclusion for Periodic Payments". Specifically "excludes from gross income damage payments for inju-ries or sickness whether paid as lump sums or as periodic payments. Any amount received for agreeing to assume a liability forperiodic payments of personal injury damages will not be included in gross income to the extent it is used to purchase an insurance annuity or a U.S. obligation to cover the liability. The provision is effective for taxable years ending after 1981".
C. The mandate for court approval of structured settlement factoring transactions (i.e. sale of structured settlement payment rights, did not become effective until 2002, as part of the Victims of Terrorism Tax Relief Act of 2001.
3. How are structured settlements taxed?
AEA claims that "regular" payments from structured settlement annuities are tax-free. Another fail. Regular has nothing to do with it. Read about the taxation of structured settlements