by Structured Settlement Watchdog
If you're a Mom, Dad or a grandparent who has established a structured settlement for your child, train them early! Start with something simple like...
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by John Darer CLU ChFC MSSC CeFT RSP CLTC
I see streams of green, lump sums too; tax-free payments for you, you and you; and I think to myself, what a wonderful world, ohhh yeah.
I saw this wonderful image from the Robert Harding library taken from the middle of a mangrove forest, in Quang Ngai, Vietnam, that captures the essence of structured settlements in a perfect metaphor "Streams of Green".
"Streams of Green", as in customized payment streams of money that can individually, in parallel, or in conjunction, be used:
The interposed blue-sky reflection on the water add to the optimism that this image represents at a time when some need hope and a reason for optimism.
The lyrics of the 1967 song, "What a Wonderful World", which I've [parodied above, were written by Bob Theile (as "George Douglas") and George David Weiss, and first recorded by Louis Armstrong ("Satchmo") during the Vietnam War amid turmoil in the 1960s, talks about the beautiful things of the world such as the blue skies, the beautiful colors of the rainbow, the warmth and friendlessness most people show each other, the lovely cries of babies, etc.
Despite the numerous heartbreaking things that happen around us on a daily basis, the song’s lyrics try to make the listener understand that despite the ugly part of the world, the world also has beautiful side that is totally worth appreciating. Owing to the sheer power and beauty of the song, it has over the years been used to try to bring people of different races together. Read more at: https://www.songmeaningsandfacts.com/meaning-wonderful-world-louis-armstrong/. It appeared on the soundtrack of the 1988 movie Good Morning Vietnam, after which it was reissued as a single, rose to 32 in the Billboard Hot100 and Louis Armstrong's recording was inducted into the Grammy Hall of Fame in 1999.
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by John Darer CLU ChFC MSSC CeFT RSP CLTC
Structured settlement payees should do their best to avoid selling their structured settlement payments for pennies on the dollar, "to help pay for college" or "help pay off college loans". Many times the effective discount rate on proposed deals to sell your structured settlement are really not a good deal at all because they exceed your student loan rate.
President Biden has called for forgiving $10,000 in student loan debt as part of a broader coronavirus relief package from Congress, while Senators Schumer and Warren have pushed for vanquishing up to $50,000 in student debt. If you can hang in there without eroding the stable tax-free income provided by your structured settlement then it may be worth the wait.
Always seek independent professional advice from someone unrelated to the settlement purchaser that is soliciting you.
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by Structured Settlement Watchdog
Should there be additional safeguards on the sale of structured settlement payment rights when the sale involves adult teenagers and other young adults?
Unfortunately. when they are young and “know-it-all”, teenagers and young adults with structured settlements are heavily targeted and groomed by structured settlement factoring companies. According to one of our sources (who was once a sales rep at a company that is a member of NASP), an officer of the NASP member company, reportedly told him that "you can't have a conscience and work here". Let that sink in for a minute.
Childhood Burn Victim Gets Singed in Multiple Structured Settlement Factoring Deals
The other day I received a call from a 25 year old who suffered a tragic burn injury over the majority of her body as a child. The victim was first approached at age 18 and then, systematically eroded a substantial amount of tax free income through improvident structured settlement factoring transactions. Not only were the deals all money losers, but some of the decisions that were made would most likely never have been made if the annuitant was required to speak with a Sudden Money advisor. Among them, following the sale of future structured settlement payments at terrible loss, was proceeding, without purpose or direction, to dole out the pseudo "windfall" to hangers on.
The 25 year now laments the state of affairs and expressly stated that she wishes that her 18 year old self had someone like me to speak to. Moreover, she feels that it should have been mandatory.
The money grubbers that target these vulnerable young adults will shrug off the devastation that lies in their wake by saying " hey they were adults".
Cannibalization of structured settlement payments through factoring company selling strategy that sets young adults up to fail
As is commonly done the factoring company started with the advising an 18 years old to sell early payments, which sets up a financially immature young adult for failure. Then you have folks like then youngster Cedric Thomas who was financially raped as a young adult by Novation Funding for more than $1.4 million. One company refers to unlicensed and credentialed employees as "annuity specialists".
What Is Being Done? What Can Be Done to Protect Vulnerable Young Adults
Independent Life Insurance Company, the only life insurance company that solely writes structured settlement annuities, published policy statement on factoring, which, among other protections, states that one red flag that will trigger an objection to a structured settlement transfer petition, is where the annuitant is under 25 years old and has not received Independent professional advice. More structured settlement annuity issuers should be doing this. One Florida law firm recognized this and initiated a lawsuit against a structured settlement annuity issuer which did not object to a series of transfers after being put on notice.
Simply relying on the structured settlement annuity issuers to object is not the answer however. Laws need to uniformly require independent professional advice for would be sellers. The buyers should be paying for the IPA, in my opinion, similar to what is required under California law.
Mandatory worksheets should accompany transfer petitions to assist judges in determining best interest.
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by John Darer CLU ChFC MSSC CeFT RSP CLTC
So you want to invest in cryptos with your settlement money? Better read this!
When QuadrigaCX crypto exchange founder Gerald Cotten died in December 2018 he held “sole responsibility for handling the funds and coins,” and the remaining team members have had no luck accessing the exchange’s cold wallets since. $190 Million is at stake and QuadrigaCX has filed for creditor protection. While Cotten's widow has Cotten's laptop, it's encrypted and she does not have a password or recovery key. A consultant hired to attempt to recover it's contents hasn't had much "Cotten picking lock" or luck as the case may be. And I thought my siblings and I had it bad when we couldn't crack the password to my late mother's Iphone after she passed in March 2015.
QuadrigaCX Users have been complaining about "withdrawal issues and a lack of communication" from QuadrigaCX for months according to a report on CoinDesk.
So the next time some shyster tries to get you to sell your long term structured settlement payments for pennies on the dollar so you can make an investment in cryptos remember this "Cotten Pickin" post.
Last updated December 16, 2022
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by Structured Settlement Watchdog
We Pay More Funding LLC claims that if you want to invest your money now, but it's held up in a structured settlement they can give you a no obligation quote on your structured settlement payments today. Predator in the House.
Fuzzy Wuzzy Logic
You've all heard the nursery rhyme " Fuzzy wuzzy was a bear Fuzzy wuzzy had no hair, Fuzzy Wuzzy Wasn't Fuzzy Was he?" That applies here to the Fort Laudserdale company. Say you sell $200,000 in future structured settlement payments. If you're lucky you'll get 50 cents on the dollar. If you turn around and invest the money at 5% after tax it would take almost more than 14 years just to break even. At 7% after tax it would take more than 10 years.
WePayMoreFunding LLC is a company run by the "groomer" of Terrence Taylor
WePayMoreFunding LLC is run by Rhett Wadsworth, formerly of Structured Asset Funding, and a defendant since 2015 in the lawsuit brought by Terrence Taylor in Portsmouth Virginia. It has been alleged that Wadsworth was a central figure in the "grooming" of Terrence Taylor, who was inexplicably permitted to make 11 structured settlement factoring transactions in less than 24 months in a jurisdiction that is also at the center of a class action lawsuit. Read the Terrence Taylor complaint and then decide whether you want to deal with Rhett Wadsworth.
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FACT: Unless prohibited by the contract, the payee of a structured settlement may name and/or change a beneficiary or beneficiaries, as well as contingent beneficiaries.
If a beneficiary is named then the beneficiary needs to file a claim with the life insurer that issued the annuity, or its successor, and provide the insurer with a copy of the death certificate and a direct deposit form if electronic payments are desired.There is no need to apply the will or to go through probate, a process that could take a year or longer and subject the present value of the structured settlement payments to needless estate administration fees.
It is also possible that the deceased could have named a beneficiary for the structured settlement that is different than the allocation under the will, or the state laws of intestate succession (where there is no will).
If Novation Funding does not know the basic fundamentals of the annuities funding the payments it buys at obscene discounts, then surely it begs the question about any structured settlement advice given by the West Palm Beach company.
Watch my video about Inheriting a Structured Settlement (below). There is no rush to do anything when inheriting a structured settlement. Take time to grieve.
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by Structured Settlement Watchdog®
Novation's not so slick value proposition is an old school hustle that could have devastating consequences for structured settlement annuitants who get sucked into the Novation cash now fire sale "tractor beam".
Genex Capital weaved the same web to snare annuitants in 2009 on the basis of rising interest rates, that proved to be illusory. Anyone who heeded Genex Capital's howling would have been devastated because interest rates actually went down making the structured settlements more valuable. Read The Wolf of Structured Settlements' Inflation Howl Reduced To A Yelp.
Talk of rising interest rates is no doubt spurred by the recent small increase in the Federal Funds rate by the United States Federal Reserve ( "The Fed"). The Fed Funds rate is a benchmark interest rate—the key rate at which banks offer each other overnight loans—On June 14, 2017, The Fed raised the federal funds rate by 0.25 percentage points today and was set between 1% and 1.25%. It is the first time since 2008 that the rate will be at least 1%. According to Bloomberg, policy makers also issued forecasts showing another three (.25) quarter-point rate increases in 2018, similar to the previous projections in March. Inflation is under 2%.
Novation has a lot of fat in its deals. As I covered in a recent post, two Brooklyn New York Novation Funding cash now , structured settlement transfer hearings scheduled for August 2017, carry predatory effective discount rates of 17.07% and 19.85%. The Novation discount rates are hardly competitive.
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by John Darer CLU ChFC MSSC RSP CLTC
Are there any ethical considerations for a structured settlement co-broker placing a structured settlement for the defense using the information about the plaintiff's structure to solicit them in the future for other insurance, advisory or investment products and services by them or third parties?
Cross selling is not an unusual concept. If you go into a bank to open a savings account you might be interested in a checking account or a time deposit account or a mortgage. On a future visit to the bank the in house insurance person may try to solicit you for life insurance. But all of those sales are to customers of the bank.
Does the plaintiff, or plaintiff lawyer become a client of the defense broker simply by virtue of a private agreement between two brokers to split commissions that the plaintiff or plaintiff attorney is not a party to? Does the buyer of a property become a client of the listing broker by virtue of the entitlement to a percentage of the real estate commission earned where the buyer was introduced by the buyer's broker?
I am aware of at least one casualty insurer where this might present a problem with a vendor agreement. There may be a problem with the vendors of the defense broker and how the data is used.
One Way to Flesh Things Out
The brokers associated with the entity often submit split agreements that attempt to do a commission grab for any type of product sold to the plaintiff, not just the structured settlement annuity, whether the posturing broker had any involvement in bringing about that business or not. Those that have signed such agreements may wish to review such agreements to see if there is a time limit and if not, explore whether or not any fees are owed to them for other products sold as a result of the type of solicitation described. That a different entity is used for such solicitations muddies up the waters a bit.
Plaintiff brokers entering into co-broker agreements with defense brokers who have concerns about this issue may wish to insert language into such co-broker agreements to address the issue of using information gleaned from the case in solicitation of their clients.
If you have a lump sum coming due from your structured settlement and you have not changed your address or bank account then the check or deposit should arrive on time. It may be helpful to contact the structured settlement annuity issuer or to contact your broker or settlement adviser or financial planner to help verify that they have your current address and contact information. Most settlement agreements place the burden on the annuitant to notify the annuity issuer of address or bank account changes. It is also a good opportunity to make sure your beneficiary designation is up to date if you have more payments arriving in the future If you are just turning 18 you will be able to name a beneficiary for the first time. Naming a beneficiary means that your heirs avoid potentially significant probate delays. If you want to contact the annuity issuer directly here is a helpful list of customer service phone numbers for life insurance companies that currently issue structured settlement annuities, as well as companies that formerly issued structured settlement annuities.
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