Structured Settlement

Structured Settlements: What Are They?

In your financial planning, structured settlements are utilized 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.

Joe Jamail: Trial Lawyers & Structured Settlements

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Structured Settlement News:

Structured Asset Trust Unit Repackagings (SATURNS) Series 2003-5.
Structured Asset Trust Unit Repackagings , Ford Motor Company Debenture Backed Series 2003-5 Trust , announced today that it has received a notice from Citadel Equity Fund Ltd...

Fitch Takes Various Actions on Inland Empire Tobacco Securitization Corporation Series 2007
Fitch Ratings affirms five and downgrades two classes from Inland Empire Tobacco Securitization Corporation Series 2007, as follows: Current interest turbo term bonds: --$55,150,000 due June 1, 2021 affirmed at 'BB'; Outlook Negative; --$32,500,000 due June 1, 2021 affirmed at 'BB'; Outlook Negative...

City of New Orleans Employees' Retirement System Announces the Approval of a $69 Million Settlement . - msnbc.com
City of New Orleans Employees' Retirement System ("NOERS"), Court-appointed co-lead plaintiff in the action, today announced that on August 24, 2010, the Court approved a $69 million payment to settle all claims in a ...

Structured Asset Trust Unit Repackagings (SATURNS) Series 2003-8 Trust Receipt of Notice of Intent . - Business Wire
NEW YORK--( BUSINESS WIRE )--Structured Asset Trust Unit Repackagings (SATURNS), The Hertz Corporation Debenture Backed Series 2003-8 Trust (the EURœTrustEUR) (New York Stock Exchange Ticker Symbol EURœDKREUR), announced ...

Long Beach to pay $8M for wrongful conviction - abc7.com

Long Beach to pay $8M for wrongful conviction
abc7.com
"I'd like to thank the taxpayers of Long Beach for this structured settlement of $7.95 million," Goldstein said. Goldstein is grateful, but says no amount .

and more »

Fitch Affirms Tobacco Settlement Financing Corporation (Rhode Island), Series 2002
Fitch Ratings affirms three classes from Tobacco Settlement Financing Corporation , series 2002, and revised the Outlooks as follows: --$109,770,000 series 2002A tax-exempt turbo term bonds due June 1, 2023 at 'BBB+'; Outlook Stable; --$168,260,000 series 2002A tax-exempt turbo term bonds due June 1, 2032 at 'BBB+'; Outlook to Negative from Stable; ...

Structured Asset Trust Unit Repackagings (SATURNS) Series 2004-1.
Structured Asset Trust Unit Repackagings , Verizon Global Funding Corp. Debenture Backed Series 2004-1 Trust , announced today that it has received a Call Notice from King Street Capital Master Fund, Ltd...

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