Wednesday, April 16, 2008

“The Beginning” How the Industry Began

Filed under: Structured Settlement — Structured Settlements Pro @ 6:55 am

Many years ago it became obvious to attorneys and others involved in serious tort litigation that some plaintiffs would be better off with a settlement where the payments would be made over time rather than all in a lump sum (a “structured settlement”). At that time the concern was primarily flowing from cases where the plaintiff needed to pay medical bills over their expected life. However, there were uncertainties under the IRS code on how to accomplish this without adverse tax consequences, and while creative tax attorneys felt that they had a workable solution, everyone involved realized that a clarification to the tax code would be preferable. In the mid-1980s the tax code was amended to expressly permit structured settlements of personal injury cases where the payments over time would remain tax free.

If an injured party chose a structured settlement the defendant or their insurance company, though a special purpose entity, would purchase an annuity that would fund the structured payments. The annuity is the source of the future payments dispersed at predetermined intervals for the length of the settlement agreement.

Structured settlements appear to be an acceptable financial option for the majority of people that select them. Nearly all structured settlements stay intact through the full intended term of the settlement. However, on occasion a settlement recipient my have a change in their life circumstances that requires them to have a larger sum of cash.

For this reason, states began passing legislation allow for a settlement recipient to convert their future payments into cash. The first state to pass the legislation was Illinois in 1998. Today 46 states have “transfer statutes” that allow settlement recipients in need to convert their future payments to into a lump sum.

Popularity: 97% [?]

Friday, April 11, 2008

95% of Structured Settlements Stay Intact

Filed under: Structured Settlement — Structured Settlements Pro @ 1:45 pm

Nearly all structured settlement arrangements remain intact through the full intended term. Industry estimates approximate 95% of structured settlements remain whole for the length of the agreement.

This high statistic illustrates that most recipients of structured settlements are accepting of their decision to accept a structured settlement instead of a lump sum.

That means that only a minority ever encounters a situation where their needs have changed to the point where they have a more immediate need for cash and determine to sell some or all of their structured settlement payments. It is good to know that few ever have this situation but for those that do it is equally nice to know that they have options. Settlement recipients that are in need of cash can transfer all or some of their payments to a transfer company for a lump sum payment.

Popularity: 98% [?]

Tuesday, April 8, 2008

What is the value of your future payments?

Filed under: Structured Settlement — Structured Settlements Pro @ 7:33 am

When considering selling some or all of your future payments for lump sum cash you may want to consider what you can get for your remaining payments. To properly determine how much your payments may bring today you need to factor in the “time value of money.”

The time value of money refers to the calculation of how much a future payment is worth in today’s dollars. The value of a future payment is less today than in the future as funds received today can be invested and earn a return. So the value of $100 dollars today is greater then the value of $100 in ten years from today.

To learn more about the Time Value of Money click here or call a Structured Settlement Transfer company that can tell you what they would pay for some or all of your future payments.

Popularity: 97% [?]

Tuesday, April 1, 2008

Sell Your Structured Settlement & Still Receive Payments

Filed under: Structured Settlement — Structured Settlements Pro @ 1:32 pm

Most structured settlement recipients are not aware that it is possible to sell only a portion of a structured settlement and still receive future payments. In fact, it is actually common for recipients to sell only a portion of their payments to meet their immediate financial needs. This way they receive lump sum cash for the payments they transfer and maintain ownership of the remaining payments. They will continue to receive their scheduled payments for the portion of the settlement they did not sell.

One of the many benefits of selling future payments from a structured settlement is the flexibility. This option provides settlement recipients with the ability to meet their specific short term financial needs.

Popularity: 97% [?]