Structured Settlement
Understanding Structure Settlements
A structured settlement is the payment of money that is received for a
personal injury or workers' compensation claim where all or part of the
settlement calls for future periodic payments. The structured settlement
is generally composed of a combination of an immediate lump sum cash
amount and a series of future periodic payments that are specifically
designated to meet the needs of the individual claimant. The structured
settlement is usually set up as an annuity, which cannot be pledged for
collateral for a loan and is usually dispersed monthly, quarterly or
semiannually.>>
Accessing the Money
You now have a choice with regards to your structured settlement. You do
not have to be locked into a payment arrangement that does not meet your
needs nor lifestyle. You now have the choice of selling all or part of any
remaining payments for a lump sum of cash. You should be aware that it
will take at least 90 days to complete the process of accessing the money.
Beware of anyone that claims that it will take less time!
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Structured Settlement Payment
Benefits of Structured Settlement Payments
A structured settlement payment can be designed to match individual needs.
It can be set up so that an individual receives sufficient tax-free cash
at the time of settlement in order to cover costs, medical liens,
expenses, attorney fees and to provide initial liquidity. Structured
settlement payment agreements are very unique. The structured settlement
payments are tax-free pursuant to §§ 104(a)(2) of the Internal Revenue
Code (Title 26 U.S.C.) if based on personal physical injury or sickness,
or to fund future payments for a workers' compensation claim under §§
104(a)(1). >>
More Benefits
Structured settlement payments on the behalf of minors have significant
advantages over cash settlements. Firstly, with a cash settlement the
individual could have immediate access to the funds when they turn 18
years of age. This could mean handing a very large check to a 18-year-old.
Not always a wise choice. Additionally, the investment of the settlement
proceeds may be governed by the probate court. With a cash settlement, tax
returns must be filed each year until the minor reaches the age of 18
years old. This in itself could be a paperwork nightmare. If a structured
settlement is set up instead, a lot of these headaches can be avoided.
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Structured Settlement Info
Your Structured Settlement Info Web Site
Fortunately for you, there is now a choice to access those annuity
funds today! With this in mind, we created Structured Settlement Info.
We, at Structured Settlement Info want to provide you with general
information about some of the facets of structured settlements, annuities
and sellouts. If you want to sell your structured settlement you deserve
and need some basic information about annuities, and how to go about
selling them. In addition, we at Structured Settlement Info have
tried to put together information regarding tax advantages, and what to
watch out for when selling an annuity. We hope our site helps you make the
best choices for your situation!
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What is a Structure Settlement?
A structured settlement for physical injury or workers' compensation
claims is the payment of money where all or part of the settlement calls
for future periodic payments. If you are informed about all the ins and
outs of structure settlement, you will be able to make the best decision
for your personal finances. It's worth your time to take some time to get
all the needed information before you make any decisions regarding
structured settlement and annuities. There are so many options available,
you want to make sure you are making the best choice.>>
There Must Be a Court Order Issued Prior to Selling
On January 22, 2002, President, George W. Bush signed into law a bill that
protects individuals when selling their structured settlement payments to
meet unplanned future financial needs. This new law makes all structured
settlement payment sales subject to a court order. If there is no court
order, a tax that is equal to 40% will have to be paid on the total amount
of payments being sold. This new law helps those individuals from being
defrauded. >>
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Structured Settlement Company
IRS Definition of Structured Settlement
The term 'structured settlement' according to section 5891 of the Internal
Revenue Code, means an arrangement - "(A) which is established by - (i) a
suit or agreement for the periodic payment of damages that is excluded
from the gross income of the recipient under section 104(a)(2)," or "(ii)
an agreement for the periodic payment of compensation under any workers'
compensation law is excluded from the gross income of the recipient under
section 104(a)(1)," and ''(B) under which the periodic payments are - "(i)
of the character described in subparagraphs (A) and (B) of section
130(c)(2), and (ii) as payable by a person who is a party to the suit or
agreement or to the workers' compensation claim."
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How to Assess Strength of the Structured Settlement Company
All structured settlement companies proposed - either by the annuity or
issuer, or the guarantor must meet stringent criteria. Some assignment
structured settlement companies or guarantors are not life insurance
companies and thus, do not have the ratings normally assigned by the
independent analysts to life insurance companies. In such case, ratings by
independent analysts and financial information about the non-insurance
company guarantor can be obtained.>> |
