Structured Settlement

Structured Settlements: What Are They?

Structured Settlements are used to pay out a large sum of money over time. Much the same way that you pay your credit card bill every month, a creditor uses a structured settlement to pay out what they owe to a person on a regular schedule. Most structured settlements are purchased annuities, paying out over time on an annual basis.

The most spectacular form of structured settlements are lottery payments. Rather than deal with the financial hit of handing out a single check for tens to hundreds of millions of dollars, state governments with lottery programs buy an annuity that’s guaranteed to pay out the entire promised amount, usually at a discount – the annuity holder invests the money in bonds or other stable investments, sufficient to pay out the annual payment and turn a bit of a profit for the annuity holder.

The other common use of structured settlements is in court damage cases and they work in much the same way. A plaintiff wins a judgment in court for damages and the defendant will typically buy an annuity to pay out the damages on an annual basis, putting the payment schedule in the hands of the annuity holder. From a corporate tax purpose, purchasing the annuity is a one-time-charge and there are several advantages to doing this. The structured settlement type payment is the result of changes in federal laws dating back to 1982 and is meant to provide a steady stream of income for the recipient to pay for long term care for disability or injury payments.

Private citizens can also buy annuities, though this is less common than it used to be. Annuities bought this way were used extensively as supplemental retirement income, before the regulations on IRAs, 401(k) programs and Roth IRA’s allowed people to get more direct control over their retirement investments.

If you’re the beneficiary of an annuity, it can present some problems for you. First, there’s some small temptation, when getting that big annual check, to blow it on something celebratory, knowing that your day job can support you for the rest of the year. While this can be fun, it’s very rarely sound financial planning. The second problem posed by an annuity is that the payments usually don’t increase over time. This is the chief problem with them as a retirement strategy. Bringing home $500 a month in the mid-80s was a decent retirement income, assuming the house and car were paid for. Trying to squeeze by on $500 a month 20 years later is considerably more difficult, as day to day expenses rise with inflation on an annual basis.

Most annuities are set up as regular payments for 10, 20 or 30 years. Sometimes an emergency strikes and an annuity payment isn’t always the best way to handle it. At that point,there are several firms out there that will pay you cash for an annuity. They offer you a large sum of cash up front and buy the annuity from you.

Structured Settlement News:

Firms paying $1.25 billion for 20 percent of Oncor (Fort Worth Star-Telegram)
Two foreign investment firms will pay $1.25 billion for nearly 20 percent of Oncor Electric Delivery, the utility that delivers power to about 3 million customers in North Texas...

Structured Settlement Payments EUR How To Know When To Sell Yours - PRLog.Org (press release)

Structured Settlement Payments EUR How To Know When To Sell Yours
PRLog.Org (press release), Romania - Aug 13, 2008
Structured settlements provide injured persons with an opportunity to capitalise upon an injury suffered through negligence. The main issue is how best to .

Jakubson Offers Retirement Proposal - TheDay

Jakubson Offers Retirement Proposal
TheDay, CT - 23 hours ago
In his retirement proposal, Jakubson is seeking continued health insurance benefits for himself and his wife, a structured settlement of his heart and .
Details of Jakubson's retirement proposal released Shore Line Times
all 2 news articles

I Need Money NOW!!! - InjuryBoard.com

I Need Money NOW!!!
InjuryBoard.com, FL - Aug 8, 2008
They even buy out an individual's structured settlement in order to give them money NOW. These structured settlements are entered into to protect the .

Gas Natural signs agreement with UBS for future acquisition of . - Energy Business Review

Gas Natural signs agreement with UBS for future acquisition of .
Energy Business Review - 5 hours ago
By Staff Writer The operation, which is structured via an equity swap, will allow the Spanish gas company to finalize it either through a cash settlement or .

Blue Coast pricing confirmed - STORM

Blue Coast pricing confirmed
STORM, UK - Aug 8, 2008
A structured settlement is an agreement between a claimant and a defendant, whereby the claimant agrees to settle a lawsuit in exchange for periodic .

Structured Settlement
Small periodic payments from your structured settlement aren't enough to cover everything. A structured settlement company like Woodbridge Investments will help you get lump sum of cash you need now. » View Tutorial...

Money Doesnt Grow on Trees
Money grows in investments, paying debts, and careful management. Dont count on winning the lottery; you are more likely to be struck by lightening*. And waiting for an inheritance could be a long and fruitless wait. Nope. ...

Mass. Mutual will pay a record $1.25b dividend
EUR¦ structured settlement annuities, investment management, mutual funds, and trust services, as well as EUR¦..

MICHIGAN: Gannett to cut 1,000 jobs (Detroit Free Press)
Gannett Co., the nation's largest newspaper company and owner of the Detroit Free Press and USA Today, said it plans to eliminate about 1,000 positions at its U.S. community newspapers, boosting its shares more than any day in almost 21 years. ALSO: Borders bid unlikely; and Prudential seeks help...

Technorati Tags: Structured Settlement, Structured Settlements: What Are They?, Structured Settlement

Annuities: The Shocking Secrets Revealed.

Structured Settlement Blog