Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews

Seneca One Finance Outrageous Solicitation to Structured Settlement Annuitants

by Structured Settlment Watchdog™

An official August 26, 2014 post to the Seneca One Facebook page actually says this "Do you want to retire broke? It's scary to think about it. But not impossible to avoid--especially if you are receiving structured settlement payments"  Pure aggressive BS from a member of the National Association of Settlement Purchasers. Download Seneca One Finance Retire Broke- Financial Services - Timeline _ Facebook 8-26-2014   

People live off their income, not their assets 

If you have a structured settlement and it's paying you a guaranteed income tax exempt "salary" of $60,000 annually for your lifetime, that's more than what the U.S. Census Bureau states the average working American earned during 2012 before tax!

Trading Stable Income for B.S.?

If structured settlement payment rights are considered an asset and liquidated for investment purposes, the unfortunate seller who buys into Seneca One's BS, trades stable guaranteed income for an investment of only a fraction of the present value because of the discounting to present value and the costs and profit for the settlement purchaser that are built into the transaction.

I really hope Mark Perriello of the AAPD is reading this. Like him, I am in favor of a structured settlement secondary market.  It just needs some enforceable regulations and rules concerning sales practices and the manner in which people are solicited.

Settlements, Mediations, Managing Financial Transitions | Transition Stress

by John Darer® CLU ChFC MSSC CeFT® RSP CLTC

Plaintiffs are often asked to make life impacting financial decisions during a period of heightened stress.

Transition stress can impair the decision making process, perhaps even leading to a frozen state, or a combative state, where making a decision seems impossible.

Where does that leave you if you are the plaintiff, the defense or plaintiff lawyer or a mediator, are in the middle of a mediation on a personal injury or wrongful death case, or having settled the personal injury or wrongful death case and trying to wrap things up?  In some cases it may even lead to conflict between plaintiffs and their personal injury lawyers, despite the job the lawyers have done in obtaining a favorable recovery, not to mention the impact on accounts receivable from the resulting delay.

Understanding and managing transition stress should be an important consideration when a case is heading towards a possible settlement, even before settlement discussions begin at mediation or elsewhere.

John Darer is a Certified Financial Transitionist What is A Certified Financial Transitionist? (CeFT) (4structures.com)

John Darer's article Clients Need Help Planning Life Transitions was published in the June 9, 2014 issue of the Connecticut Law Tribune. Download Reprint_John Darer 060914 CT Law Tribune.

Sudden Money advisors have a process and protocols for helping clients navigate their best path. For more information please call me at 888-325-8640.

Read about Settlement Planning What is Settlement Planning? Settlement Advisors and Financial Transitionists NY|NYC|CT|NJ (4structures.com)

Last updated May 18, 2024 

 

Inherited IRA Can Be Tapped By Creditors Says Supreme Court in New Ruling

by John Darer CLU ChFC CSSC RSP CLTC

The United States Supreme Court  (SCOTUS) ruled that inherited Individual Retirement Accounts (Inherited IRAs) ARE NOT shielded from creditors in bankruptcy proceedings, a decision that clears up confusion about the status of IRAs that parents leave to their children.

While bankruptcy law typically protects retirement assets from the reach of creditors,  unlike a typical IRA, money in an inherited IRA can be withdrawn without waiting for the new owner to retire. The Supreme Court reasoned that this change in the status of the account is readily available to payoff creditors.

In the underlying case, a Wisconsin couple, Heidi Heffron-Clark and her husband, declared bankruptcy and were seeking to protect an IRA that she inherited from her mother.

Cite:  SCOTUS  Clark v. Rameker, 13-299.

Using Structured Settlements May Help Older Plaintiffs/Lawyers Get More Out of Social Security

by John Darer CLU ChFC MSSC RSP CLTC

Instead of taking social security retirement at age 62, a plaintiff or his/her/their contingency fee earning lawyer can wait until age 70, maximize retirement credits and receive more benefits!

Whether you are an injury victim,  a survivor of someone who has died a wrongful death or a personal injury trial lawyer or contingency fee lawyer with the ability to structure attorney fees,  a structured settlement can help you get there.  A structured settlement can be designed to replicate,  what you would receive from social security if you began taking it at age 62 or 65, giving you stable income to age 70 or more.

For example, an attorney with the highest Average Indexed Monthly Earnings (AIME) collecting social security beginning at age 62 will draw in approximately $1,992 per month.; beginning at age 65 will draw $2,431 per month and holding out to age 70 will draw $3,425 per month for those drawing in 2014.

While there are other factors such as your health, family history and your perspective on longevity that go in to such a financial decision, maximizing social security should be explored.

 

Why Structured Settlements for "Older People"? To Allay The Greatest Fear

by John Darer ® CLU ChFC MSSC CeFT RSP CLTC

Delicate Balance of Income and Expenses

Nearly 50% of older Americans depend on Social Security for at least 50%-89.9% of their income, according to Retirement Income Journal which cites the April 29, 2014  AARP and the U.S.Census Bureau and draws from a statistical sample of over 42,000.  Moreover, 23.6% rely on Social Security for 90-99.9% of their income and 14.3% rely on Social Security for 100% of their income.

Fear of Running Out is Greatest Fear | FORO 

A decade ago a MetLife Employee benefits study found that 48% of employees rank "outliving their savings" or Fear of Running Out (FORO) as their greatest retirement fear. A January 30,2008 -February 2,2008 Gallup poll revealed that such concerns are not limited to "older people". The Gallup poll also revealed that over 40% of 18-29 year olds  and 53% of 30-64 year olds having these concerns.

Why Structured Settlements?  Because Certain Sells®

Structured settlements provide safety, security and contractual guarantees that are attractive as stable income solutions for people of all ages.  Most people would like a "job" they can never be "fired" from, and income they can count on.

For more information on structured settlements for seniors and retirees, please click here

There are other options for those seeking stable income solutions who do not qualify for structured settlements

Give me a call to chat about them if you'd like.  Toll-free 888-325-8640

Last updated February 4, 2024

Because Certain Sells® is a registered trademark of 4structures.com, LLC  (USPTO Reg.6237309)

 

 

Social Media Road Kill | SHP Financial Structured Settlement Investment "Like a Bank CD"

by Structured Settlement Watchdog

 

It's bad enough that like a few others,  SHP Financial refers to structured settlementpayment rights as an annuity, when the purchaser is not buying an annuity, Now,in its latest tweet and one on February 22, 2014, SHP Financial  describes structured settlement payment rights as  " like a  bank CD". It's absolute rubbish.

 

The SHP tweet in question...

 

SHP Financial ‏@shpfinancial  4h

Like a bank CD only better: buy this A++ $65k #StructuredSettlement, enjoy 5% annual ROI for next 9yrs yielding a $100k payout in 3/2023

8:21 AM - 24 Feb 2014 · Details

Tweet text

To best illustrate how utterly absurd and misleading SHP Financial's tweet "like a bank CD" is, I will refer to a 

2013 Genex Capital receivables purchase agreement posted on aurorafreelance.com as a typical example that sheds more light on the risk of purchasing structured settlement investments (also known here and there as "recycled structured settlements" and by the misnomer "secondary market annuities") and the deal complexity that is far different from a CD, far different from  actually buying a retirement annuity,  or far different from accepting a structured settlement when your personal injury, wrongful  death, workers compensation or employment liability case is settled.  

In bold print at the top of the signature page appears:

• "Risk of Default on the part of the Issuer or Owner and that in the event of default, you may be unable to recover your investment".

• "We (Genex Capital Corporation) undertake no obligation or liability toward you for any failure of the Issuer, Servicing Company, or any other Person to make payment in respect to the Annuity or Receivable or to perform any other obligations under the Annuity or Receivable. You waive your rights to claim against us (Genex Captital Corporation) in these circumstances as set out in Section 5.1 of part 2"

Section 5.1 of the 2013 Genex Capital receivables purchase agreement Version 4 reads:

"Genex undertakes no obligation or liability towards Buyer for any failure of the Issuer, Servicing Company or any other Person to make any payment in respect of any Annuity or Receivable or to perform any other obligations under the Annuity or Receivable.  Buyer waives any right it may have to make any claim (for damages or otherwise) against Genex, any other member of the Genex Group and any of their Representatives (the “Released Parties”) arising out of or in connection with any such failure and releases the Released Parties from all such claims, except to the extent resulting from the willful default or gross negligence of any of the Released Parties."

Section 5.2 of the 2013 Genex Capital receivables purchase agreement Version 4 reads:

"Collection of Receivables.  Genex will cooperate with Buyer and will provide Buyer with such 
reasonable assistance as may be requested by Buyer from time to time in order to allow Buyer to 
collect payments under any Receivable. Buyer will indemnify Genex for all Losses which Genex may incur as a result of or in connection with anything done by Genex in pursuance of this section 5.2. In no event will Genex be required to institute any legal proceeding under this section 5.2. unless Genex is entitled to select and employ its own legal advisors and Buyer has indemnified and secured Genex to Genex’s satisfaction against all Losses that may be incurred by Genex in connection with such claim. Genex may, in its sole discretion, require Buyer to take conduct of any proceedings arising under such claim on behalf of Genex, subject in all cases to Genex being indemnified by Buyer against all Losses that may be incurred in connection with such claim and being kept informed and consulted in regard to the progress of the claim.

Section 5.3 of the 2013 Genex receivables purchase agreement reads:

Buyer may, from time to time, receive marketing materials, offers or other communications from competitors of Genex who obtain Buyer’s contact details from public records available as a result of the publication of a court order or other information in respect of a Receivable Transaction or otherwise. Buyer hereby irrevocably appoints Genex its attorney and authorizes Genex to contact any such competitors on Buyer’s behalf in order to demand the cessation of all such communications and to take all such legal or other action as may be deemed reasonably necessary by Genex to stop such communications and seek other relief, including damages. Buyer will cooperate with Genex in connection with the enforcement by Genex of its rights under this section, including by 
providing Genex, upon request, with copies of all such offers or other communications from competitors

According to Wikipedia, a certificate of deposit (CD) is a time deposit, a financial product commonly sold in the United States by banks, thrift institutions, and credit unions, but may be sold by wire houses that sell securities (brokered CDs).

CDs are similar to savings accounts in that they are insured and thus virtually riskfree; they are "money in the bank". CDs are insured by the Federal Deposit Insurance Corporation (FDIC) for banks and by the National Credit Union Administration (NCUA) for credit unions. They are different from savings accounts in that the CD has a specific, fixed term (often monthly, three months, six months, or one to five years), and, usually, a fixed interest rate. It is intended that the CD be held until maturity, at which time the money may be withdrawn together with the accrued interest

Last  time I checked, the process to buy a certificate of deposit was simple,  it can be bought directly at the branch of your bank and it is insured by the FDIC.  This latter is one very important distinction. Structured settlement payment rights ARE NOT insured by the FDIC. Neither is a returement annuity or life insurance.  The Plymouth, MA financial planning firm should know better.

Canine image: Dreamstime.com

 

 

Retirement Planning and LTC Disconnect

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Long Term Care is the top concern of 31% of 67 year olds surveyed by MetLife Mature Master Institute, yet less than 25% have addressed this concern with long term care insurance. Nationwide found in a similar survey that most Americans over age 50 have some plan in place for retirement,  57% do not account for long term care in their planning.

Insurance News Net observes an ongoing disconnect between long term care awareness and long term care planning.

Consider that Bank of America Merrill Lynch found in its 2013 employee benefits survey that 79% of the 1,000 employees it surveyed would be willing to give up 5% or more of their salary if it meant having reliable income in their later years.  38% said they would give up 10% or more and 52% of pre-retirees would give up 10% or more.

Addressing retirement without planning for long term care is a long term recipe for a bad time. 

 If you're in your mid 60s and first thinking about long term care insurance you've got a greater expense, which leads to affordability issues and makes for possibly more limited options and possible age-related insurability issues.     

Plan ahead to avoid retirement asset erosion and the concomitant effect on ability to meet financial commitments.

Don't forget to ask your parents about their long term care planning. Involve your siblings. It's as much about you  and your quality of life as it is about them and theirs. 

Settlement proceeds from a personal injury, wrongful death or other type of settlement may be structured to contribute to the annual funding of long term care insurance.

 

 

 

" Mirrored Pension": is Not a Structured Settlement

by John Darer® CLU ChFC CSSC RSP CLTC

Is that "Tompora" in your belly or are you just happy to "sashimi" goes the corny joke

I tell it because personal finance columnist Susan Tompor's June 20, 2013 piece for the Detroit Free Press deserves to be gutted by  a "Fugu" chef and artfully displayed like the image above for having mislabeled structured settlements.

Tompor has something important to say which is essentially,  that seniors need beware of  "cash now pushers" bearing "good tidings" for retiree's pension plan payments or rights to an income stream, such as hmm, a "structured settlement"

Tompora inaccurately states or includes as a non sequitur:

1. A “mirrored pension” or structured settlement shouldn’t be confused with the one-time lump sum payouts that have been made to former retirees by their old employers, like the General Motors and Ford offers that first rolled out last year.     Comment:  "Mirrored penisons" ARE NOT structured settlements as the term "structured settlement" is defined in the Internal Revenue Code  [IRC 5891 (C)(1)]
2. These are different deals, and structured settlements are way more costly for consumers. Comment: Structured settlements are actually less costly for consumers. There are no ongoing administration fees or commissions.
3. A structured settlement can be filled with high fees for brokerage commissions, legal fees and various administrative charges. Comment: And donuts can be filled with jelly or cream.  I repeat "structured settlements are actually less costly for consumers. There are no ongoing administration fees or commissions".
4. The products carry various names: mirrored pensions, pension income programs, pension loans, secondary-market annuities and factored structured settlements.  Comment: Non sequitur!  Secondary market annuities are a misnomer for annuity or structured settlement payment rights (another defined term under the Internal Revenue Code) that are sold to individual investors. They are and properly defined as structured settlement receivables. An assignee of a tranferee  (investor) is signing a Receivables Purcahse Agreement (RPA) Factored structured settlements are also off topic.

"Free" doesn't mean you don't have to do the "RE"-search

Long Term Care | Fidelity Retiree Health Study "Create a Plan and Start As Early as Possible"

by John Darer CLU ChFC CSSC RSP CLTC

Creating a plan, that it takes into account health and long term care, and starting to save as early as possible are key aspects of a successful retirement savings plan

I was disappointed the chosen excerpts of a Fidelity Retiree Health study that have been cited in the mainstream press, which are grossly misleading because key data has been omitted, therefore dangerous to be relied upon by those planning for retirement. For example, the New York Post picked up a Reuters sourced paragraph and on May 17, 2013 presents the headline "Retiree med costs decline" and suggests that a 65 years old couple can survive on $220,000, while irresponsibly failing to include a critical caveat about the cost of long term care that WAS partially cited in the Fidelity report.

The Fidelity report actually said "Fidelity has calculated an annual estimate of medical expenses for retirees since 2002. For many Americans, health care is likely to be among their largest expenses in retirement. The estimate, which is calculated by Fidelity’s Benefits Consulting, does not include any costs associated with nursing home care and applies to retirees with traditional Medicare insurance coverage". (emphasis ours).

What is the potential impact of long term care (home care, assisted living, nursing home) on retirement savings?

According to the 2012 Sourcebook for Long Term Care Information published by the American Association of Long Term Care Insurance (AALTCi), the value of daily benefit claims paid by the 10 leading long-term care insurers for long term care rose 53% between 2007 and 2010.

The largest open claims in a 2012 AALTCi study demonstrate a range from $616,682 to $1,700,000 for females and $495,502 to $1,200,000 for males. Just one spouse could wipe out $220,000 in no time.

Long term care is custodial care. Medicaid typically only covers long term care in a nursing home setting. Medicare cannot be relied upon for long term care.

If you are planning for retirement at any age, then consider long term care insurance and buy it as early as possible so that you have lower premiums. Look at LTCi as "retirement plan insurance". I bought my long term care policy when I was 38. Since then my daily benefit has just about doubled with compounding, my premiums reasonable by starting early. By age 65, subject to the claims paying ability of my insurer, I will have a source to pay for long term care that will exceed $270,000 annually and will be subject to further compounding. I'm not bragging. I want my readers to think ahead and be prepared.

A top assisted living facility in New Canaan Connecticut costs about $282 a day in 2013!  That's $102,930 for a year.

According to Brad Kimler, executive vice president of Fidelity’s Benefits Consulting business. “It is extremely important that health care costs are factored into retirement savings strategies today so that retirees can be prepared to pay their medical bills throughout retirement.” He says and I agree that "creating a plan and starting to save as early as possible are two key aspects of a successful retirement savings plan. But it’s also imp ortant to identify a specific retirement income stream to address health care costs in retirement. Having assets that are earmarked for health care expenses will help ensure retirees can cover these costs when they arise, as well as help manage their overall retirement savings portfolio.”

Thought must be put into where one would ideally like to be cared for in the event extended care is needed   ( retirement community, home care, assisted living, live with children) . If you want choices and a greater level of dignity then planning is necessary.

                  

            Involve the family and start early.

 For more information call me at 888-325-8640

Images : Acremead/Dreamstime and Signorina/Dreamstime
 

LTC Zen™ | Balance Now Peaceful Later

by John Darer CLU ChFC CSSC RSP CLTC

What does Long Term Care have to do with settlement planning?  In some cases everything! 

What is a life care plan all about anyway? 

"The life care plan is a dynamic document based upon published standards of practice, comprehensive assessment, data analysis, and research, which provides an organized, concise plan for current and future needs with associated costs for individuals who have experienced catastrophic injury or have chronic health care need"s. [Source: International Academy of Life Care Planners, 2003]

The operative word is "plan".

Consider the following questions, which could apply to anyone:

1. How many of you work with catastrophic cases where the tort feasor is uninsured or underinsured? If you suffer an injury that requires extended care and the negligent party is under insured, what plans do you (or they) have for financing extended care? In these cases, I'm not only talking "seasoned citizens". The need for long term care can arrive at any age.

2. How many of you are, or know of people, sandwiched between raising children or paying for college and have one or more parents who are over age 60?

I know of a contemporary , a single parent whose mother with Alzheimer's had no LTCi  who had to quit her job for 6 months, while raising young teenage sons so she could care for her mother with Alzheimer's. The consequences to her of her mother not having LTCi were lost income, lost retirement accumulation opportunity, diversion of attention from children and personal wear and tear.

Have you discussed long term care with your spouse, parents, siblings,children friends?

3. How many of you are, or know of people, nearing retirement, possibly still paying for college and having one or more parents who are over age 70?

• Say you've been successful at saving for retirement and have a few million in the bank.  Good work, you have been thinking about the future. But are you missing something?
  
• What have you allocated to pay for extended care inc case you and/or your spouse need it?
  
• Have you done any research into the costs of various forms of care and the ways in which such care is delivered?
•  Have you had a discussion with your parents, siblings, and your own children to address long term care issues yet?
  
• If you (or your parents) needed extended care, where would you (or they) prefer to be?

• In a hospital setting?
• In a nursing home?
• In a senior commnity?
• In long term rehabilitation facility?

4. How many of you contribute, or know of people who contribute annually to a retirement plan?

Does it make sense to allocate a small percentage towards a stop loss that can protect the integrity of  your assets and /or retirement come should you, your spouse, or your parents need extended care? 

 

5. Who considers the long term health effects of being a parent/caregiver for a child suffering from catastrophic mental or physical injuries?

Does it make sense to do planning now when there are less likely to be underwriting hurdles and the price is much cheaper? Addressed earlier, LTC can serve as a comfortable "sinking fund" . 

Long Term Care Planning

For those that plan ahead, long term care solutions are available that:

• Helps to maintain dignity
• Permits claimant and their families to make choices
• Helps Protect Savings, Retirement, Lifestyle, Longevity of Unpaid Caregivers (which are often family and friends)
• Helps Keep Families Together?

I bought my LTC policy at age 38.

On May 7, 2013 I addressed the Society of Settlement Planners on the subject of Long Term Care (see photo below) at its annual meeting at the Vdara Hotel in Las Vegas.

In late January 2013, I participated in a special project with a major American life insurance company, designed to help educate the public about long term care insurance and the real life impact it can have to families. During my May 7, 2013 presentation, with special permission of the producer,  I held a private screening of the 5 minute video testimonial " Family Matters: The Darer Family Story". The video will be released in due course by the insurer.

John Darer is a Certified in Long Term Care  (CLTC) and a member of the American Association of Long Term Care Insurance and offers a variety of long term care solutions among the settlement planning and financial planning services provided to clients.  In addition to the CLTC and othe other designations cited above,  John Darer is working towards the Chartered Healthcare Consultant (ChHC)  professional designation.