In any situation where parties negotiate a payout over a period of time in taxable or tax-free situations, we now have the ability to use a structured settlement approach to help the parties achieve a better settlement.
Traditional Structured Settlements
Structured settlements with qualified assignments (novations) have been used successfully for many years in:
* Physical Injury Cases (since 1983)
* Workers' Compensation Claims (post-August 1997)
Structured Settlements for Other Situations
Now the success of the traditional structured settlement with a novation is available for a wider range of situations, including:
* Attorneys' Fees (physical injury and non-physical injury)
* Employment Cases
* Commercial Business Transactions
* Long Term Disability Cases
* Old Workers' Compensation Claims (pre-August 1997)
* Non-Bodily Injury Claims
* Punitive Damages
* Most other negotiated settlements
Structured Settlements: Physical Injury Cases
Fee Option for Attorneys
- Possible deferral of income,
- Planning for life events (college expenses, retirement, etc.), and
- Fixed payments for a specified period.
Prudential cannot provide tax advice to you. This information should not be construed as tax advice or legal advice on the structuring of attorney's fees. We suggest that you seek your own tax and legal counsel.
If you would like more information, please visit www.pruco.bb.
Special Considerations
Any person entering into a structured settlement should be on guard for potential exploitation in relation to the settlement:
Excessive Commissions - Annuities can be highly profitable for insurance companies, and they often carry very large commissions. It is important to ensure that the commissions charged in setting up a structured settlement don't consume an inappropriate percentage of its principal.
Overstated Value - Sometimes, after negotiating a particular settlement figure, the defense will overstate the value of a structured settlement. As a result the plaintiff, in accepting the settlement, in fact obtains a significantly lower dollar value than was agreed upon. Some defendants have nominally paid the full amount of the settlement, knowing that they would later obtain significant rebates from the annuity companies they used. Plaintiffs should consider compariing the fees and commissions charged for similar settlement packages by a variety of insurance companies, to make sure that they are in fact getting full value. A plaintiff may wish to make it a condition of the settlement that the defendant will actually pay the full value of the settlement in setting up the structured settlement, and that any rebates received by the defendant for annuities included in the settlement be payable to the plaintiff.
Self-Dealing - There have been cases where the plaintiff's lawyer is also in the insurance business, and sets up a structured settlement on behalf of a client without disclosing that the attorney is purchasing the annuities from his own business, or is pocketing a large commission on the annuities. Similarly, there have been situations where the plaintiff's attorney has referred the client to a particular financial planner to set up a structured settlement, without disclosing that the financial planner will be paying the attorney a referral fee in relation to the client's account. Make sure that you know what financial interest, if any, your lawyer has in relation to any financial services sold or recommended by the lawyer.
Life Expectancy - It is unfortunate, but many people who receive large personal injury or workers' compensation settlements will have a shortened life expectancy as a result of their injuries. It is important to consider life expectancy in association with any structured settlement, and to consider whether it is appropriate to enter into an annuity where payments will cease upon death. Sometimes it will make sense to insist upon an annuity that pays a minimum number of payments, or one that will pay a balance into the plaintiff's estate, such that the value of the settlement is not lost to an insurance company upon the plaintiff's untimely death.
Using Multiple Insurance Companies - For larger settlements, it often makes sense to purchase annuities for a structured settlement from several different companies, dividing the settlement between those companies. This can provide you with protection in the event that a company that issued annuities for your settlement package goes into bankruptcy - even in the event that one of the companies defaults in part or in full on your settlement payments, you would still receive full payment from the other companies.
Selling a Structured Settlement
If you have a structured settlement, you may have been approached by a company interested in purchasing your settlement, or may be curious about selling your settlement in return for a lump sum buyout. About two thirds of states have enacted laws which restict the sale of structured settlements, and tax-free structured settlements are also subject to federal restrictions on their sale to a third party. Also, some insurance companies will not assign or transfer annuities to third parties, to discourage the sale of structured settlements. As a consequence, depending upon where you live and the terms of your annuities, it may not be possible for you to sell your settlement.
Keep in mind that companies which buy structured settlements intend to profit from their purchase, and sometimes their offers may seem quite low. You may benefit from approaching more than one company in relation to the sale of your settlement, to make sure that you obtain the highest payoff. You also want to be sure that the company which wants to buy your settlement is established, well-funded, and reputable - you don't want a fly-by-night outfit to obtain the rights to your annuities but to disappear or go bankrupt before paying you the buyout money. You may have to go to court to get a judge to approve the buyout. It is usually a good idea to consult with a lawyer before entering into an agreement to sell your settlement.
Benefits of a Structured Settlement
One significant advantage of a structured settlement is tax avoidance. With appropriate set-up, a structured settlement may significantly reduce the plaintiff's tax obligations as a result of the settlement, and may in some cases be tax-free.
A structured settlement can protect a plaintiff from having settlement funds dissipated, when they are necessary to pay for future care or needs. Sometimes a structured settlement can help protect a plaintiff from himself - some people simply aren't good with money, or can't say no to relatives who want to "share the wealth", and even a large settlement can be rapidly exhausted. Minors may benefit from a structured settlement as well, such as a settlement which provides for certain costs during their youth, an additional disbursement to pay for college or other educational expenses, and then one or more disbursements in adulthood. An injured person who has long-term special needs may benefit from having periodic lump sums with which to purchase medical equipment or modified vehicles.
In some situations, it will be better for a severely disabled plaintiff to set up a special needs trust, rather than entering into a lump sum or structured settlement. Any plaintiff who is receiving, or expects to receive, Medicaid or other public assistance, or the guardian or conservator entering into a settlement on behalf of a disabled ward, should consult with a disabilities financial planner about their situation before choosing any particular settlement option or structure.
Some people who enter into structured settlements feel trapped by the periodic payments. They may wish to purchase a new home, or other expensive item, yet be unable to muster the resources because they can't borrow against future payments under their settlement.
Some people will do better by accepting a lump sum settlement, and investing it themselves. Many standard investments will give a greater long-term return than the annuities used in structured settlements.
Understanding Structured Settlements
Have you brought a lawsuit against a company or an individual that you claim caused you permanent harm as a result of their negligence or intentional misconduct? (that’s just a fancy “lawyer” way of saying that you’re hurt and you say it’s their fault). Did you win or settle your lawsuit? If so, then you need to understand the basics about structured settlements, as it may be an important option to consider.
Ordinarily, when you win a judgment or settle your lawsuit the defendant has to pay you the judgment or settlement amount in a lump sum. Let’s say, for example, you have a form of cancer caused by asbestos called asbestosis. You sue the asbestos manufacturer, who agrees to settle out of court for a million dollars (don’t get excited or disappointed; this is just an imaginary amount for example purposes). You get a check for a million dollars, right?
That’s one option, but a structured settlement might make more sense depending on your circumstances. A structured settlement pays you in installments over time instead of a single lump sum.
Installment payments can be structured in a number of ways to suit your needs and to protect you from inflation. They can range from a simple yearly payment to complex arrangements consisting of an initial lump sum payment, monthly indexed installments, deferred payments, and special provisions relating to the future care or death of the insured.
Typically, the defendant would purchase an annuity (from an annuity or insurance company) for a dollar amount that is paid up front. The annuity provides regularly scheduled income payments as specified by you and your attorney under the terms of the structured settlement.
What are the advantages of a structured settlement? Well, for one thing, you are guaranteed a source in income for life. A second important advantage is tax management: you may be able to substantially reduce the taxes you would have to pay Uncle Sam on any investment income that would otherwise accrue from investment of a lump sum settlement.
Apart from the tax savings, it’s also important to “know thy self” when making a decision about structured settlements. Are you the kind of person who would head to Vegas, do a little world travel, buy lots of toys, and basically blow your money until you have nothing left of your million dollars in a year or two? If so, a structured settlement might be the way to go.
There are some negatives, however, that you need to be aware of. First, once you agree to it, you are stuck with the terms of the structured settlement. You cannot change it at some later date. Hence, it’s very important to be represented by a good attorney and tax advisor who will help negotiate structured settlement terms that meet your needs, such as protection from rising inflation. If you don’t expect to live very long, on the other hand, you may want a settlement that guarantees a minimum payment even if you die before the guarantee period expires. This can protect your family or beneficiaries from being left without financial resources.
Contrary to the suspicions of some uniformed plaintiffs, structured settlements are not intended to and do not (assuming you are represented by a decent lawyer) re-assess or change your award. They are simply a device to allow for payment of your judgment or settlement over time, or on an installment basis. They are flexible and can be structured to meet many needs and life circumstances.
People who receive structured settlement payments however may decide at some point during the life of the settlement that they need more money in the short term rather than periodic payments over time. In this case, some people opt for a structured settlement factoring transaction. With this type of transaction the structured settlement recipient can sell (or encumber) all or part of their future periodic payments for a present lump sum.
While a structured settlement is not appropriate for everyone, they can be very useful, depending on your needs. Your attorney can help you evaluate whether they are suitable for you. Some additional links with more information about structured settlements are included at the bottom of this page.
The One Stop Resource For Selling A Structured Settlement
I am absolutely thrilled with the job your company did for me. I was informed almost on a daily basis where my transaction was and when I would receive my money. I enjoyed working with James and the rest of your staff. Thanks again.
The One Stop Resource For Selling A Structured Settlement
If you have questions about selling your structured settlement or annuity payments, please visit our FAQ or blog section to read up on your rights as a structured settlement recipient. These resources are updated frequently and provide the most extensive content in the settlement funding industry. If you have any further questions, please feel free to contact us.
Settlement Quotes Structured Settlement Blog Posts
Today, JG Wentworth announced that three of its non-operating parent holding company level affiliates � JGW Holdco, LLC, J.G. Wentworth LLC, and J.G. Wentworth, Inc., -- have filed a voluntary reorganization plan under Chapter 11 of the U. S. Bankruptcy Code in t........
Settlement Quotes has received several inquiries regarding structured settlement factoring companies delaying their obligation to pay annuitants. Here are a few of the blog comments that Settlement Quotes has received in the past few months: "JASON JAMERSON- I began the sell of an annuity payment with Stone Street Capital on Aug. 5th 2008 because they prom........
Sell Annuity, Structured Settlement, or Lottery Payments Today
Get the Best Price for your annuity-- Guaranteed--by having our Certified Funders compete to give you their Best Offers up front.
Sit back and relax while We do all the Shopping for You.
Get up to 6 Price Quotes without delay. Here's how:
Online:
- Complete the Form at the top of this page.
- When prompted, tell us your payment dates, payment amount(s) and the name of the insurance company that pays you.
- Get your Price Quotes at your designated email address usually within 1 hour and not more than 24 Hours.
- Accept the highest price online and Receive your Sale Documents by Fedex within 24 hours.
- Get Paid by direct Wire Transfer into your Bank Account.
By Phone:
- Contact one of our Customer Service Experts at 1-888-665-1257.
- Receive assistance in requesting your Price Quotes.
- Get a phone call from our Customer Service Expert as soon as the quotes have been submitted by our Certified Funders.
- Accept the highest price and Receive your Sale Documents by Fedex within 24 hours.
- Get Paid by direct Wire Transfer into your Bank Account.
Get the Most Money and the Fastest Service in the Industry.
Get Cash For Your Structured Settlement Payments
Settlement Quotes provides quotes for structured settlements.
How do you know your payments are a structured settlement that can be offered for purchase by Settlement Quote’s Certified Funders?
Do you or your beneficiaries receive future payments
- From an Insurance Company
- As a result of a lawsuit, personal injury or other similar claim
- Tax free
- Either in the event of your death (guaranteed) or only while you are alive (life contingent)
- Not a result of a workers compensation claim
If the answer to these 5 questions is “Yes” and you are an adult then Settlement Quotes can shop your payments to get the highest price quotes in the industry.
See for yourself, get your 6 Price Quotes today:
Click here to get started today!
Selling your structured settlement is easy with Settlement Quotes and its Certified Funders:
- The sale is permitted by State and Federal laws—even if your insurance policy contains anti-assignment language.
- Your sale proceeds are Tax Free because the Federal Tax Laws preserve the tax free status of your structured settlement in the event of sale.
- Our Certified Funders handle all of the paperwork and get the necessary court approval all at No Cost to you.
- Your sale proceeds are paid to you by direct wire into your bank account. You have immediate access to these funds.
- The transaction is Risk Free because you are protected by a court process.
Would you like to receive a lump sum of cash for your structured settlement? Thousands of people every month ask us if they can sell structured settlement payments? The answer is Yes! You can sell your future payments for a lump sum of money.
Settlement Quotes will obtain 6 lump sum quotes from competing companies to provide you with the most cash for your future settlement payments. Settlement Quotes will also provide a free analysis of your payment stream.
We will help you receive the most cash possible for your structured settlement. Our main goal is to create competition from our large network of structured settlement funding companies. This competition will reduce the discount rate thereby putting more money into your wallet.
We offer different payment solutions to help you achieve your financial objectives. Whether you would like to sell your entire structured settlement or just part of your structured settlement, we will make it work. Settlement Quotes is here to help any way we can.
Settlement Quotes has become a leader in the structured settlement factoring industry due to our continued support and quotes that we provide for our clients.
