by Structured Settlement Watchdog®
One of the purposes of licensing is to help assure that those that practice a profession possess a fundamental body of knowledge before being legally permitted to solicit consumers. The individuals and companies that solicit consumers to sell their structured settlement payments for a discounted lump sum of cash are currently immune from licensing and a regulated fundamental body of knowledge, for an unexplained reason. In my opinion and a growing body of others this must change.
US Settlement Funding, a company registered in California, associated with cash now for structured settlement troll Kyle Forster, a young gent whose phone number can be found on "complaints" for US Settlement Funding competitors on Rip Off Report and Pissed Consumer, has a glossary on it website that is deserving of this critique:
A. Fixed Annuity
USSF An annuity that pays the investor a fixed about (sic) of income.
Why USSF is Wrong Maybe the person who wrote the glossary for USSG "had a stuffy nose" that day! A fixed annuity could have multiple definitions. "Fixed" could refer to payments or rate of interest. On the one hand it could be (1) a type of insurance contract issued by a life insurance that provides for payment to the annuitant in fixed installments; it could be (2) an annuity that bears a fixed rate of interest; it could be (3) an annuity that is tied to a index, such as a " fixed index annuity". In this case the amount of income may be adjusted in accordance with the performance of the index.
B. Guaranteed Payments
USSF Payments made under an annuity contract that are guaranteed to be made even if the payee is living or not.
Why USSF is Wrong: Guaranteed or certain payment under an annuity contract are those payments that will be paid whether or not the payee survives the entire payment schedule (whether or not the payee is living)
C. Immediate Annuity
USSF: These are annuities whereby the annuity issuer will begin making
payments either at least one year out or immediately to the payee.
Why USSF is Wrong: IRC 72(u)(4) states that the term “immediate annuity” means an annuity—
- which is purchased with a single premium or annuity consideration,
- the annuity starting date (as defined in subsection (c)(4) of which commences no later than 1 year from the date of the purchase of the annuity, and
- which provides for a series of substantially equal periodic payments (to be made not less frequently than annually) during the annuity period.
USSG:The ability to sell an asset quickly with little or no loss in value
Why USSF is Wrong: Liquidity the ability to be converted into cash. The service that USSG sells, is guaranteed to result in a loss in value in exchange for your financial asset (your structured settlement payment rights)
E. Qualified Assignment
USSF: This is a legal assignment of the obligation to make future payments according to a structured settlement that satisfy the requirements of Internal Revenue Code for favorable tax treatment of a structured settlement.
Why USSF is Wrong: A qualified assignment is the transfer of a legal obligation to make future periodic payments payable as damages under a suit or agreement that satisfies the requirements of IRC 130. The tax treatment of future periodic payments to the payee is a function of the type of damages. A structured settlement does not have to be set up with a qualified assignment. Buy and hold structured settlements and the use of periodic payment reinsurance do not involve qualified assignments.
F. Structured Settlement Annuity
USSF: A special annuity that is set up as consideration for the settlement of a lawsuit.
Why USSF is Wrong: A structured settlement annuity IS NOT simply the consideration for the settlement of a lawsuit. A structured settlement annuity is a type of customizable annuity that includes both immediate and deferred components. Elements of a contract include an offer, acceptance and consideration. In those lawsuit settlements that includes a structured settlement, the consideration will include cash as well as a promise to make future periodic payments. The future periodic payments may be funded with a structured settlement annuity as a so-called " qualified funding asset"
USSF: A tax form for the United States which certifies an individual’s taxpayer identification number.
Why USSF is Wrong A W-9 form is a request for Taxpayer Identification Number (TIN) from the IRS. It is the taxpayer who/which is certifying TIN on the form. not the form doing the certifying :-) . The form W-9 can be used by a tax payer to certify TIN for an individual, various forms of business entity or a trust/estate.Under penalties of perjury, the person signing the W-9 certifies that:
- The number shown on the W-9 is the taxpayer's correct taxpayer identification number (or taxpayer is waiting for a number to be issued to him/her or it); and
- Taxpayer is not subject to backup withholding because: (a) He/she/it is exempt from backup withholding, or (b) He/she/it has not been notified by the Internal Revenue
- Service (IRS) that he/she or it is subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that he/she or it is no longer subject to backup withholding; and
- He/she or it is a U.S. citizen or other U.S. person; and
- The Foreign Account Tax Compliance Act (FATCA) code(s) entered on the W-9 form (if any) indicating that he/she/it isexempt from FATCA reporting is correct