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Structured Settlements Offer Advantages over Lump-Sum Payments
A structured settlement, which offers injury victims cash payments through a long-term annuity as compensation for their damages and medical expenses, offer a number of possible advantages over payment in a lump sum. While the lump sum payment is the traditional way for responsible parties to pay accident claims, the structured settlement offers payments over the span of an agreed-upon period of time. This length of time may span from several years up to the remainder of the life of the injured party, depending on the severity of the accident, the amount of money involved, and the agreement reached between the two parties. While they are not ideal for everyone, particularly those who are experienced investors or those who need a large sum of money at once for immediate medical expenses or the purchase of a home, structured settlements can offer a simpler, safer payment solution for many people who are victims of an accident or injury. ©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including http://www.StructuredSettlementHelp.com/ and http://www.HomeEquityHelp.net/
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Options for Lawsuit Settlement Winners Receiving Periodic Payments On January 22,2002, President George W. Bush signed into law a bill that protects individuals who must sell their structured settlement payments to meet unplanned financial needs. H.R.2884Victims of Terrorism Tax Relief Act of 2001 (Signed by the President January 22,2002)) Surviving High Debt States Are you more likely to have more debt according to what state you live in? In a recent report done by Experian on the debt averages per state, the answer is yes! The report, compiled from approximately 3 million consumers nationwide, shows that the North East states of New Hampshire, Connecticut and Rhode Island have the highest average overall debt in the nation of $16,845, $15,314 and $14,643. The report measures overall debt of a consumer; everything present on a credit report, including credit cards and installment debts but excluding mortgage debt. Massachusetts, Maine and Delaware also followed closely behind the top three. Structured Settlement as an Investment Vehicle You always hear people talking about the latest investment vehicle they're using. It's water cooler talk, dinner table talk, phone talk, it's everywhere talk. People are always looking for a way to invest their money that might be a little 'different' from what others are doing. Buying a structured settlement is one of those options. Structured Settlement ? Guaranteed Income for those with Disabilities Up until twenty years ago, anyone who won a lawsuit as a result of a claim involving worker's compensation, wrongful death or accident had to accept a lump sum payment as their compensation. The payment would be intended to be invested, with the beneficiary living off of the proceeds for as long as their recovery was expected to take. In many cases, this type of settlement works fine, but in other cases, the results are a disaster.It is difficult enough for someone who has been through the trauma of an accident or illness to have to adjust to a new lifestyle without having to also become an expert in the art of financial investing. If you have been active all of your life and you suddenly find yourself in a wheelchair and having to handle assets of several hundred thousand dollars or more, you could be overwhelmed. You could hire someone to handle the investments for you as well as the tax issues, but what if the person you hired wasn't trustworthy? What if you hired a greedy relative who took all of the money? What if you hired someone incompetent? These problems, and statistics that show that people who receive large sums as compensation for accident, injury, or wrongful death often spend all of their money in a short period of time, led to Congressional action in 1982 that amended the Federal tax code to allow for structured settlements. A structured settlement is simply an agreement between the responsible party and the injured party that the payments will be made over time, rather than in a lump sum. The two parties reach an agreement, the party responsible for payment purchases an annuity, usually through an insurance company, and the injured party will receive steady income over a period of years or even a lifetime.The payments are adjusted for inflation; the sum of all of the payments will be greater than if the amount had been paid as a lump sum. Because the payments are purchased up front as an annuity, the paying party actually pays less than the sum of the payments, as well. The result is generally a win-win situation, with the injured party receiving a steady stream of income over as long a period of time as necessary, while the paying party does not have to worry about making monthly or annual payments. While a structured settlement is not the ideal payment arrangement in all situations where a long term injury settlement occurs, it does work well in many cases where a lump sum payout might be undesirable. A Revolutionary Fundraising Opportunity -- Life Settlements Amid fundraisers' growing concerns about the current charitable giving climate, dampened by the erratic stock market and shaky economy, a new fundraising opportunity has emerged ? Life Settlements. The Target Capital Structure Firms can choose whatever mix of debt and equity they desire to finance their assets, subject to the willingness of investors to provide such funds. And, as we shall see, there exist many different mixes of debt and equity, or capital structures - in some firms, such as Chrysler Corporation, debt accounts for more than 70 percent of the financing, while other firms, such as Microsoft, have little or no debt. Should You Sell Your Structured Settlement? The courts have just awarded you a settlement in the amount of $1.3 million dollars for injuries you sustained while using the Widget Corporation's product. However, the terms of the settlement require that Widget pay you a small amount right now, with the remaining funds to be dispersed over the next 20 years. This "structured settlement" works fine for some people, but you have medical bills that need to be paid now. What can you do about it? Answer: you can sell your structured settlement and receive additional cash now. Class Action Lawsuits First of all, let me say that anyone who has been in any way hurt or injured by any other party and settled through a class action lawsuit, disregard this article. I am more interested in the little frivolous lawsuits that award pitiful amounts to offended parties who most likely had no idea they were offended. What is a Structured Settlement A Structured Settlement is an agreement between a personal injury victim ( a Plaintiff ) and an Insurance company ( the Defendant )to compensate the Plaintiff by the defendant with long term periodicpayments instead of a single cash lump sum. Structured Settlements Offer Advantages over Lump-Sum Payments A structured settlement, which offers injury victims cash payments through a long-term annuity as compensation for their damages and medical expenses, offer a number of possible advantages over payment in a lump sum. While the lump sum payment is the traditional way for responsible parties to pay accident claims, the structured settlement offers payments over the span of an agreed-upon period of time. This length of time may span from several years up to the remainder of the life of the injured party, depending on the severity of the accident, the amount of money involved, and the agreement reached between the two parties. Depending on the specific circumstances of the case, structured settlements can have numerous advantages over a lump-sum payment: They are tax free. Thanks to a 1982 change in the Federal tax code, payments on a structured settlement are free of state and Federal taxes. The paying party funds the settlement through the purchase of an annuity which earns the interest to fund the continued payments. This is not the case with a lump-sum payment, which the injured party must invest themselves. Any interest earned on those investments are taxable. They are potentially safer. Most people who come into a large sum of money suddenly find that they are quite popular with long-lost relatives, unscrupulous purveyors of investment schemes, and good, old-fashioned thieves. By receiving payments in substantially smaller amounts, the beneficiaries of a structured settlement have far fewer worries about having others take advantage of them, which could leave them both poor and without adequate medical care. They are simply less trouble. It's difficult enough to adjust to changes in your life if you are seriously injured without having to also take the new responsibility of investing and managing a large sum of money. Not only must you invest the money, but you must invest it wisely, knowing that it must continue to fund your living and/or health care expenses. The regular payments of a structured settlement, along with their tax-free status, simplify day to day living considerably.While they are not ideal for everyone, particularly those who are experienced investors or those who need a large sum of money at once for immediate medical expenses or the purchase of a home, structured settlements can offer a simpler, safer payment solution for many people who are victims of an accident or injury. Unstructured Settlement Me'Lisa Delaney, 43, is brain-injured as a result of a 1984 medical error that caused a stroke during surgery. The hospital agreed to settle via a structured settlement, as overseen by a county conservatorship. The Cost of Not Having Money The self-esteem factor of not having enough money is underestimated. You know what I mean don't you? The agony of financially struggling and the ecstasy of financial abundance are dramatically different moments in a person's life. And I for one would choose the abundance over the struggling any day. Structured Settlements Are Like Ants Ants are powerful creatures. The powerful ant legs are able to lift 20 times their body weight, and run the equivalent of a man running as fast as a racehorse. Structured Settlements are strong agreements that turn an agreement to pay a plaintiff into an ironclad guaranteed structured award. Consider a Structured Settlement? Structured settlements have been around for a long time however their popularity has steadily increased over the past 6 years. In 1999 only 7% of insurance settlements that were under $7,000 were completed as structured settlements. While we don't have hard data for the current year, the number is much higher now. What is Structured Settlement? Because it is tailor-made for individual cases, the structure may also include some immediate payment to cover special damages. The payment is usually made through purchase of an annuity from a Life Insurance Company. Subcontractor A trade contractor such as a roofer who usually subcontracts with a general contractor. Subrogation Once a company has paid a loss for which someone other than the policyholder is responsible, it may have the right to recover this loss. Structured Settlement Factoring Have you received a structured settlement recently? A structured settlement can be a good thing if you have been a victim of malfeasance, have been severely injured or can no longer physically work. Structured settlements will help you pay bills. But what do you do if you have a structured settlement, which is coming your way and you really have decided that you might prefer to have the cash instead? Well, if this is the case you are in luck because there are companies, which will buy your structured settlement for a discounted price? A Structured Lawsuit Settlement Seemed Like a Good Idea at One Time You are receiving payments spread out over months, years, even a lifetime. It's great when the money arrives but the payments are often too small or too spread out to really satisfy your needs. Careful research could yield more of your cash faster. There are some half dozen financial institutions with the knowledge and resources to effectively advance your future lawsuit payments.While the rewards are obvious, the risks are not so easily understood. Once you identify an annuity buyout funding source, consult your attorney for an explanation of the legal requirements. Keeping the Lawsuit End in Mind 2 key points to stay focused on, as you are settling your lawsuit; a quick and fair settlement and consideration for current and future needs. The process of settling a lawsuit can be a tedious and mysterious event. Relying on your busy attorney to keep you informed can be an exercise in frustration. The entire process can seem as slow as molasses. Compounding the pain could be the financial and emotional difficulties caused by the source of the lawsuit itself. Offshore Asset Protection Trusts for US Citizens When it comes to discussing offshore anything and US citizens - from offshore trusts to investments, from offshore banking to company incorporation - it's important to note the following facts: - If This Describes You, Dont Cash out Your Annuity There are companies that purchase future payments. Personal injury settlements are often structured to pay out over time. As are a portion of lottery wins, paid via an annuity over a period of 20 or more years. There are companies, under the authority of state and federal regulations, that will accelerate future payments and pay out a lump sum of cash now.
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