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.
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Saturday 5 February 2011
Monday 14 September 2009
When to Sell Your Structured Settlement ?
Each individual has different reasons for wanting to sell their structured settlement, however, first you must decide if it is the right decision for you.
A structured settlement often follows a life changing incident, whether it be positive or negative. Due to these circumstances, you may be faced with the need for a big lump sum payment than tiny monthly payments over a quantity of years. So, where do you turn? To a company that can buy your structured settlement from you and turn it in to an immediate payment that you may use on whatever you see fit.
The Benefits of Selling Your Structured Settlement
A big portion of those who receive a structured settlement can benefit from selling it for a lump sum payment. The situations listed in this section represent possible circumstances of individuals that may get the most rewards from selling their structured settlement.
· If you and your relatives decide that this is the time to finally make that big purchase that you have had your eye on. For example, if you have previously been denied mortgages or loans and would like to take this opportunity to buy that dream home you have always wanted. Or if you have a infant or infants who are preparing to be going off to college and you fear you may not have the financial means to support that dream otherwise.
· If you cannot wait to get tiny, spread-out payments over a long duration of time due to a dire financial situation or hefty medical bills and/or lawyer fees. Lots of of the situations that can bring about a structured settlement can also stick the individual with such obligations.
· If you have talked with a financial advisor and both of you feel that you could profit more by investing a lump sum payment, than waiting on monthly payments. If the funds is invested properly, there is a chance that you could finish up with more funds in the finish than your settlement was ever worth. However, this should not be a plan that is entered in to lightly. You should work closely with a financial specialist and feel confident that you have found a great opportunity to invest in.
· If you are of older age and feel that you may not be around long to receive a fair amount of your structured settlement. You may need to the chance to enjoy the benefits of your settlement or may need to secure part of it for your relatives after your passing. This way you can distribute the funds as you see fit instead of relying on lawyers or courts.
No matter what your reason for wanting to sell your structured settlement, choosing this option puts you back in control of funds that is rightly yours. The problem that lots of individuals have with their structured settlements is that the control over their funds is left to lawyers, courts, and the company or persons paying out the settlement. You are now able to say where, how, and - most importantly - when you spend your funds.
· If you don’t plan to use the funds right away, but would put it in to a savings or funds market account to draw interest. This would be best suited for anyone who has a hefty settlement, can find an account with big payoff terms, and designs to keep the majority of the funds in the account for lots of years.
The Drawbacks of Selling Your Structured Settlement
For a few individuals, selling their structured settlement and receiving a lump sum payment may not be in their best interest. One must also assess these situations and decide if they outweigh the reasons you are considering selling your settlement.
· Because you may lose out on a substantial portion of your settlement by selling it, if you are in a financial situation where regular monthly payments will only be a bonus on top of what you already make, waiting out your settlement may be in your best interest. However, if you’re a senior, then you should also take your age and the length of your structured settlement in to consideration. This would be the ideal situation for anyone who is young that they have a great chance of living out the life of their settlement.
· First and foremost, selling you structured settlement means that you will get less funds than you would if you were to keep it. However, for lots of people considering this option, this seems like a win-win situation - they will get one big lump sum payment and the company they sold it to will make a profit in the finish. The nice news is that since you have several companies competing for your settlement, you can select the one that will give you the a portion of the full settlement that you can live with.
· For those reasons, you should also not consider selling your structured settlement if you have an addiction to gambling, shopping, or drugs.
· If you are a person who is poor at managing big sums of funds, then selling your structured settlement may not be right for you. For example, if you are the kind of person who gets a big paycheck every two weeks and finds themselves running low on available funds at the finish of those two weeks, then that may be an indication that needs to be closely looked at. In this type of circumstance, having your settlement portioned out to you on a monthly basis may keep you from spending it quickly. Once your settlement is gone, you will be back at square one.
Most individuals receiving a structured settlement can benefit from selling it to a company that can give them a big lump sum payment or shorten the life of the settlement, if they are older persons, an individual who has enormous expenses due to an accident or court case, anyone in a critical financial position, or one who wishes to make a big purchase for themselves and their relatives. Finding the right company with terms that fit your needs is a key component of making your experience with selling your structured settlement a positive one.
· If your settlement was due to an accident that has put you out of work and the funds from it will replace your monthly income, then keeping the payments on a monthly basis may help your relatives keep your finances in order. However, even in this situation selling your settlement may be best for you if you would like to renegotiate your payments in to a larger sum each month to shorten the life of the settlement.
David Springer is a consultant for Sovereign Funding Group. Sovereign Funding Group is an experienced, reputable company that offers convenient, no-risk services to help you with the selling of your structured settlement
A structured settlement often follows a life changing incident, whether it be positive or negative. Due to these circumstances, you may be faced with the need for a big lump sum payment than tiny monthly payments over a quantity of years. So, where do you turn? To a company that can buy your structured settlement from you and turn it in to an immediate payment that you may use on whatever you see fit.
The Benefits of Selling Your Structured Settlement
A big portion of those who receive a structured settlement can benefit from selling it for a lump sum payment. The situations listed in this section represent possible circumstances of individuals that may get the most rewards from selling their structured settlement.
· If you and your relatives decide that this is the time to finally make that big purchase that you have had your eye on. For example, if you have previously been denied mortgages or loans and would like to take this opportunity to buy that dream home you have always wanted. Or if you have a infant or infants who are preparing to be going off to college and you fear you may not have the financial means to support that dream otherwise.
· If you cannot wait to get tiny, spread-out payments over a long duration of time due to a dire financial situation or hefty medical bills and/or lawyer fees. Lots of of the situations that can bring about a structured settlement can also stick the individual with such obligations.
· If you have talked with a financial advisor and both of you feel that you could profit more by investing a lump sum payment, than waiting on monthly payments. If the funds is invested properly, there is a chance that you could finish up with more funds in the finish than your settlement was ever worth. However, this should not be a plan that is entered in to lightly. You should work closely with a financial specialist and feel confident that you have found a great opportunity to invest in.
· If you are of older age and feel that you may not be around long to receive a fair amount of your structured settlement. You may need to the chance to enjoy the benefits of your settlement or may need to secure part of it for your relatives after your passing. This way you can distribute the funds as you see fit instead of relying on lawyers or courts.
No matter what your reason for wanting to sell your structured settlement, choosing this option puts you back in control of funds that is rightly yours. The problem that lots of individuals have with their structured settlements is that the control over their funds is left to lawyers, courts, and the company or persons paying out the settlement. You are now able to say where, how, and - most importantly - when you spend your funds.
· If you don’t plan to use the funds right away, but would put it in to a savings or funds market account to draw interest. This would be best suited for anyone who has a hefty settlement, can find an account with big payoff terms, and designs to keep the majority of the funds in the account for lots of years.
The Drawbacks of Selling Your Structured Settlement
For a few individuals, selling their structured settlement and receiving a lump sum payment may not be in their best interest. One must also assess these situations and decide if they outweigh the reasons you are considering selling your settlement.
· Because you may lose out on a substantial portion of your settlement by selling it, if you are in a financial situation where regular monthly payments will only be a bonus on top of what you already make, waiting out your settlement may be in your best interest. However, if you’re a senior, then you should also take your age and the length of your structured settlement in to consideration. This would be the ideal situation for anyone who is young that they have a great chance of living out the life of their settlement.
· First and foremost, selling you structured settlement means that you will get less funds than you would if you were to keep it. However, for lots of people considering this option, this seems like a win-win situation - they will get one big lump sum payment and the company they sold it to will make a profit in the finish. The nice news is that since you have several companies competing for your settlement, you can select the one that will give you the a portion of the full settlement that you can live with.
· For those reasons, you should also not consider selling your structured settlement if you have an addiction to gambling, shopping, or drugs.
· If you are a person who is poor at managing big sums of funds, then selling your structured settlement may not be right for you. For example, if you are the kind of person who gets a big paycheck every two weeks and finds themselves running low on available funds at the finish of those two weeks, then that may be an indication that needs to be closely looked at. In this type of circumstance, having your settlement portioned out to you on a monthly basis may keep you from spending it quickly. Once your settlement is gone, you will be back at square one.
Most individuals receiving a structured settlement can benefit from selling it to a company that can give them a big lump sum payment or shorten the life of the settlement, if they are older persons, an individual who has enormous expenses due to an accident or court case, anyone in a critical financial position, or one who wishes to make a big purchase for themselves and their relatives. Finding the right company with terms that fit your needs is a key component of making your experience with selling your structured settlement a positive one.
· If your settlement was due to an accident that has put you out of work and the funds from it will replace your monthly income, then keeping the payments on a monthly basis may help your relatives keep your finances in order. However, even in this situation selling your settlement may be best for you if you would like to renegotiate your payments in to a larger sum each month to shorten the life of the settlement.
David Springer is a consultant for Sovereign Funding Group. Sovereign Funding Group is an experienced, reputable company that offers convenient, no-risk services to help you with the selling of your structured settlement
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