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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. Delaney soon married Terry, who took over the conservatorship of the settlement and proceeded to make loans against the settlement, which equaled about $350,000. It wasn't long before all the money was gone. According to the civil complaint filed by Me'Lisa, Terry had used the loan money to purchase "controlled substances, illegal drugs, jewelry, liquor and other non-business items." Of course Delaney is suing for 10 million in punitive damages. A lot of time energy, and effort was put into structuring a settlement in the best interest of Me'Lisa and it was too easily undone. Should we consider making settlements "unstructurable"? There is some concern that "factoring" or "cash out" companies take advantage of customers, taking a large portion of the settlement in exchange for a significantly smaller lump sum. In Me'Lisa's case it makes sense to put in place more safeguards to protect her rights and interests in her settlement, specifically because she is brain injured. We should look to protect minors, senior citizens, and mentally impaired or injured settlement winners. Everyone else has access to resources and information to help them make the best choices and should be entitled to choose whatever they wish. I personally know of cases where cashing out was life saving, dream fulfilling, and absolutely a positive choice. I am also personally aware of situations where customers have cashed out their settlements and it was absolutely a bad decision. Unstructuring a settlement seems to be a great American Freedom, but it doesn't have to be as morally insipid as what happened in the Delaney case. Jason Rigler
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RELATED ARTICLES
Structured Settlements ? Should You Sell Yours? In recent years, it has become more common for victims of accidental injury who accept a settlement from the at-fault party to accept a structured settlement instead of a lump-sum payment. With a structured settlement, the injured party receives payments over an agreed-upon length of time ? five years, ten years, or even a lifetime, rather than receiving payment up front in a lump sum.There are advantages to this for both parties. The injured party may require constant medical care, and the regular payments of a structured settlement guarantee that income will be available to cover the medical expenses. For the paying party, the settlement can be paid by purchasing an annuity, which allows an upfront payment to accrue interest, thereby producing a larger long-term yield from a minimal investment. In many cases, a structured settlement is viewed as a win-win situation for both parties.There are restrictions on structured settlements that may not suit everyone. Once you agree to accept a structured settlement, you cannot trade it back in for a lump sum payment, nor may you use it for collateral for a loan. What if you want to buy a home and pay cash? What if some other unexpected expense comes up and you simply do not have the cash available? Under certain circumstances, you may be able to sell your structured settlement to a third party.There are companies that are interested in purchasing structured settlements for investment purposes. Perhaps one or more of these companies has already contacted you. They will agree to pay you a lump sum, in cash, in exchange for you signing over your future annuity payments to them. Be aware that any party that offers to buy your annuity is interested in doing so for investment purposes. They wish to make money on the transaction, and for them, that profit will be spread over the long time that it takes to receive all of the payments that constitute the settlement. Once you combine the factors of time, interest, inflation, and the buying party's profit, you will find that the offer made to you will seem quite small. The amount you receive will be an amount equal to the present day value of the settlement, minus whatever sum the investors require for their profit on the transaction.You should also know that some states prohibit the sale of structured settlements, that some insurance companies who handle the annuities prohibit sales to a third party, and that you will probably need to go to court to arrange the sale. In addition, there may be tax considerations involved in the sale, and the taxes due on large sums of money are not insignificant. If you are interested in selling your structured settlement, you will definitely want to discuss the sale with an attorney and a tax advisor beforehand.While structured settlements are designed to benefit those who receive them, there are times when it may be desirable or necessary to sell them. If you are considering selling your settlement, make sure that you weigh all of your options carefully. Once you agree to sell, you cannot get it back. Individual Voluntary Arrangements. IVA What is an IVA? 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. 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. Lucky Have you ever looked around and wondered how everyone is buying houses? Are they really doing that much better than you are? Maybe. Maybe not. Some people have gone deep into debt to purchase a home and are teetering on the brink of financial free fall. Others used creative unconventional financing to afford a home. There may be not-yet discovered risks and consequences to this type of home financing. But there is a fairly substantial group of people who were able to buy a house because they were the recipients of some unexpected or untraditional cash windfall. 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. Making Backwards Choices I was reading this past week about a woman who lost 170 lbs in 9 months by eating backwards. She had breakfast for dinner and dinner for breakfast. She lost the weight without leaning on a typical diet plan. Her result, losing 170lbs, has lasted ten years. It's not so much the weight loss that caught my attention, but the fact that she took responsibility for change in her life. When Should You Not Cash Out Your Annuity? You should not cash out your annuity when it's not in your best interest.Here are 3 reasons it might not be in your best interest; it's too soon, you don't have a good enough reason, it will cost you too much. Every day someone cashes out their annuity or settlement when it might not have been in their best interest. It's an easy mistake to make when the call of money and burden of financial stress is weighing heavily on you. But read carefully and maybe you can avoid digging the hole deeper. 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. 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. 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. 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. Investing in Structured Settlements Often some derelict will be awarded some huge amount of money from a noble company due to a run away jury in a Kangaroo Court. Since many times the company paying the money out agrees on a structured over time settlement, the plaintiff of course is a lowly human and has lots of desires for riches and he has little if any cranial capacity to understand the enormous gift the courts have grated him as our nation turns in to a socialist quagmire of re-distributing wealth to those who do not deserve it. Yes a few have been damaged and do deserve something, but usually not. If you disagree with that, you are wrong and I am right. What is a Trust and what are the Benefits? Trusts are becoming a popular way to structure business and personal affairs. If you are considering using a trust in any way, you should be clear on the legal obligations and the relationships involved. Always make sure you obtain proper advice before setting up a trust. Most lawyers are proficient in this area, but it is still advisable to talk to a legal advisor specialising in this area. 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. 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)) 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. 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? 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. Annuity Transfer - What Are the Risks Many people who know in the back of their minds that they got thepossibility to transform a monthly payment or annuity long termpayments into a big lump sum and by that to relieve sometemporarily financial problems, or need to buy a new car or a houseor help their children and so forth are tempted to exercise thisprocess into action.Although it is a very natural feeling and sometimes even a real lifeneed or deep inner quest for power and control, it is not in their bestfinancial interest to say the least.
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