Taxes and structured settlements

In structured settlements, injury compensation is paid in installments over years rather than as a lump sum up front. It has long been argued that arrangements of this sort should be strongly favored by public policy: many accident settlements are premised on the need to cover years of needed therapy or future income lost through disability, and if it’s spent down too quickly through mishandling or “lottery winner syndrome”, the victim could wind up an expensive public charge. For reasons of this sort, structured settlements have been accorded highly favorable tax treatment.

Then an industry sprang up that offered to turn structured settlements into quick cash on the barrel, a choice that many lawsuit beneficiaries might be tempted to make (or might make after being leaned on by family members). Although laws often require that conversions of this sort be submitted for review to a court, judicial review may be cursory in the absence of adversary process to call attention to the potential drawbacks of a conversion. Not only has the structured-settlement-conversion industry managed to thrive, but somehow, as Shaun Martin notes, Congress has even been prevailed on to bestow favorable tax treatment on its doings — the same doings that tend to undermine the public benefits thought to arise from the original tax-favored structured settlement. More details are to be found in this decision, PDF, in which an appeals court recently sided with the factoring companies in a series of Fresno, California disputes (also discussed at this new blog on structured settlements, via Dan Schwartz).

Tax incentives that encourage lottery-winner syndrome? To paraphrasewhat Martin says, it’s almost as if someone was managing to work the system.

Wahlstrom decries structured settlement kickbacks

Trial attorneys are pressuring the structured settlement industry to pay kickbacks in exchange for clients, an industry expert said Sunday.Mark Wahlstrom, president of Wahlstrom & Associates, wrote on his blog Sunday that settlement companies are facing "relentless pressure to from some unscrupulous plaintiffs' attorneys."I've always felt that any time we participate in something as shady as rebating or kicking back commissions, no matter how you dress it up or try to justify it, we are devaluing our professional services in the eyes of our customers," he wrote.Wahlstrom, founder of The Settlement Channel, said pay-to-play practices leads to an "endless cycle of professional debasement, deterioration of our profit margins and in ability to invest in other business lines or services to help the end consumer."He said what he finds to be "really upsetting" is the widespread pressure structured settlement brokers have on them to either make contributions to a trial lawyer association or pressure to directly pay kickback commissions in return for writing an annuity for their clients.Wahlstrom noted that he has never been solicited to make a kickback to a trial lawyer nor does he make contributions to plaintiffs' attorney groups beyond the "modest" membership fee, he said."I'm not sure what I find most appalling about this practice of demanding kickbacks from structured settlement brokers, the disgusting ethics of the lawyers involved or the pure stupidity of the settlement professionals who cave in to this pressure and write checks to these ethically challenged bags of dirt," he wrote.He offers some advice to his colleagues in the structured settlement industry. Chief among his suggestions is not to compromise one's integrity."In short, don't sell out. I promise you, you will hate yourself for it later. Most of these brokers who do it, if you look at their lives are a string of fail marriages, broken business relationships, substance abuse and other addiction problems," he said. "They are miserable people pretending they are living a life they can be proud of, but at the end of the day the money means nothing and they are forced to deal with who they really are."

Library groups gripe about settlements over Google Book Search

Three groups representing hundreds of libraries lodged a long series of concerns about a proposed settlement of lawsuits over Google Book Search on Monday--but refrained from objecting overall.
Specifically, the American Library Association, the Association of College and Research Libraries, and the Association of Research Libraries expressed some affinity for Google's mission of sharing books with the public, but raised concerns in a legal filing that the settlement would concentrate power in Google's hands and poses pricing and privacy concerns.

Google has patented technology for scanning books.(Credit: U.S. PTO)
Google is scanning millions of books, presenting their contents online at the Google Book Search site and blending some information into its regular search results, but the move triggered lawsuits by the Association of American Publishers and the Authors Guild. A proposed settlement of the class-action suit would permit Google to share some contents of books online--not just those that are in the public domain and those still being sold with which Google has agreements with publishers, but also those that are still in copyright but out of print.
The settlement terms are of high interest to the library world. Under the proposed settlement, Google would offer a free computer terminal in U.S. libraries that would permit people to read books online and a subscription service that would permit paying customers, such as larger libraries, to offer more computer terminals. In cases where readers or institutions pay for access to online books, funds would be divided between Google and a proposed independent non-profit group, the Book Rights Registry, set up to handle payments, find authors and other rights holders, and let them include or exclude their works from the project.
"The library associations do not oppose approval of the settlement. The settlement has the potential to provide unprecedented public access to a digital library containing millions of books," the groups said in their filing. "However, the digital library enabled by the settlement will be under the control of Google and the Book Rights Registry. Moreover, the cost of creating such a library and Google's significant lead-time advantage suggest that no other entity will create a competing digital library for the foreseeable future."
That power could put libraries at a disadvantage, they argue.
"We are concerned that the cost of an institutional subscription may skyrocket, as academic journal subscriptions have over the past two decades," said Erika Linke, president of Association of College and Research Libraries, in a statement.
Added Jim Rettig, president of the American Library Association, the proposed settlement "offers no assurances that the privacy of what the public accessed will be protected, which is in stark contrast to the long-standing patron privacy rights libraries champion on behalf of the public."
In its response, Google looked on the sunny side but didn't address pricing or privacy details: "We're pleased that the thousands of librarians and libraries represented by the ALA recognize the promise of our groundbreaking agreement, and we appreciate that the Library Associations do not oppose approval of the settlement. Google is proud to partner with dozens of libraries around the world as part of our Book Search efforts, and we have consistently maintained that, if approved by the court, our settlement agreement stands to unlock access to millions of books for users in the U.S."
But the library groups struck a more sober tone in their filing. Take, for example, this section on the power Google would get by virtue of obtaining online publishing rights through the class action settlement:
The settlement of copyright class action litigation might well have been the only feasible way this research tool could have been created. A class action settlement provided perhaps the most efficient mechanism for cutting the Gordian knot of the huge transactions costs of clearing the rights of millions of works whose ownership often is obscure. However, the class representatives and Google structured the settlement in such a manner as to give them enormous control over this essential facility. This is not surprising, given their economic interests. Indeed, precisely because of their economic interests, it is unlikely that they would have agreed to a structure that did not grant them such control.
To be sure, nothing in the Settlement prevents another entity from undertaking a mass digitization effort similar to Google's. But given the enormous cost of such an effort, and Google's significant lead time advantage (Google has been digitizing in-copyright books since 2004), no other entity is likely to so in the near future. Hence, there is no foreseeable threat to the control Google and the Registry have over this essential research facility.

Imperial Structured Settlements Welcomes Cleveland Clinic’s Dr. Mercedes Dullum into Their “Hearts”

Imperial Finance & Trading (“Imperial”) employees, through its affiliate Imperial Structured Settlements, recently gathered to listen to a lecture presented by cardiac surgeon Mercedes K.C. Dullum, M. D. of the Cleveland Clinic located in Weston, Florida.
Having previously listened to her speak, Imperial’s Senior Vice President Deborah Benaim snagged the first opportunity available to have Dr. Dullum as a guest. “Mercedes has shown great perseverance throughout her career as one of the few women in the country that can perform minimally invasive robotic surgery. We are thrilled at the opportunity to hear from a true pioneer in such a male-dominated field.”
Dullum, the only female board-certified cardiothoracic surgeon in South Florida, spoke for an hour on her life’s accomplishments. Her speech touched on her close family upbringing in Jamaica, to her extensive medical schooling and practice in Washington D.C., ending with her move to Florida to join the Cleveland Clinic.
At the core of the presentation beat her true passion: the human heart. Not only by sharing her years of schooling and experience, but also through wisdom and career experiences, Dr. Dullum educated over 120 employees on the important role a healthy heart plays in a happy and successful life.
“I am so happy you guys asked me to come,” Dullum expressed. “It’s great to see such a turnout at events like this; it means a lot of you are concerned about your health.” That concern demonstrated itself in a flood of follow-up questions from many who attended.
For more information on the Cleveland Clinic, Dr. Mercedes Dullum, or to assess your risk of heart disease, please visit http://my.clevelandclinic.org/heart/women/assess_risk.aspx.
About Imperial Structured Settlements
Imperial Structured Settlements is a specialty finance company that purchases structured settlement payment rights and certain annuities from individuals. People who settle a personal injury, wrongful death, or medical malpractice claim often receive their payments from an insurance company over a predetermined period of time. Imperial Structured Settlements is based in Boca Raton, Florida. For more information, please visit our web site at www.ImperialStructuredSettlements.com

Financial Forecast: Structured Settlements

What creates the need for a Structured Settlement?

If you or a loved one has been in an accident resulting in a personal injury and you are in the process of negotiating a settlement, you are about to make decisions that could impact you financially for the rest of your life.
Depending on the extent of the injury, you're ability to earn income for you and your family may have been cut short or stopped depending on the severity of the injuries. The result will be that you will receive compensation. This could be a few thousand dollars to hundreds of thousands of dollars. The issue is what do you do with that money? The facts are that most people burn through that money in less than five years. Ninety percent lose the money.
Jeff Booth: So what is a structured settlement annuity? Thankfully our congress recognized the problem and in 1982 amended the tax code to provide 100 percent of every structured settlement annuity to be exempt from federal and state taxes. To qualify, the money must be taken in the form of a structured settlement annuity. An insurance company receives the lump and sends you a tax free check as agreed to. So it is a financial plan for an injured person.
Jeff Booth: So why take a structured settlement annuity versus a lump sum? In today's financial market, if you were about to awarded $25,000 or $2,500,000 what would you do with the money? Buy that large flat screen TV, that new car you have been waiting for and surely "friends" would come forth to provide you many suggestions.
But instead you met with a member of our team and developed a financial plan that would provide you $6,000 per month increasing annually four percent compound interest to keep pace with inflation and guaranteed for life or 30 years, whichever is longer. In addition, you and your wife want to guarantee your new child the best education from preschool through college. So you agree to the following:
For each year in life, $72,000 with a 30 year guarantee and each year it would increase by four percent.
For preschool through high school, you would be guaranteed $24,000 for 12 years also with four percent annual increases.
And for college $50,000 for five years would be increased for inflation of percent.
With a structured settlement annuity the above can be completed with a settlement of $2.5 million. You would be guaranteed an income of $5.1 million. And if you lived to life expectancy, you would receive $8.2 million and again all tax free.
I am not wishing anyone to be faced with a personal injury, but if it did happen, it is important to make prudent decisions and you could have your income replaced with guaranteed raises and the best education for your child all tax free, that would be tremendous peace of mind.
Jeff Booth: When should one consider a structured settlement annuity?
Always.
Whenever the amount exceeds $10,000.
If minor is involved - yes always because a little money can be guaranteed to provide a significant amount of money for college etc.
If a life income is needed, then yes again.

Financial Forecast: Structured Settlements

If you or a loved one has been in an accident resulting in a personal injury and you are in the process of negotiating a settlement, you are about to make decisions that could impact you financially for the rest of your life.
Depending on the extent of the injury, you're ability to earn income for you and your family may have been cut short or stopped depending on the severity of the injuries. The result will be that you will receive compensation. This could be a few thousand dollars to hundreds of thousands of dollars. The issue is what do you do with that money? The facts are that most people burn through that money in less than five years. Ninety percent lose the money.
Jeff Booth: So what is a structured settlement annuity? Thankfully our congress recognized the problem and in 1982 amended the tax code to provide 100 percent of every structured settlement annuity to be exempt from federal and state taxes. To qualify, the money must be taken in the form of a structured settlement annuity. An insurance company receives the lump and sends you a tax free check as agreed to. So it is a financial plan for an injured person.
Jeff Booth: So why take a structured settlement annuity versus a lump sum? In today's financial market, if you were about to awarded $25,000 or $2,500,000 what would you do with the money? Buy that large flat screen TV, that new car you have been waiting for and surely "friends" would come forth to provide you many suggestions.
But instead you met with a member of our team and developed a financial plan that would provide you $6,000 per month increasing annually four percent compound interest to keep pace with inflation and guaranteed for life or 30 years, whichever is longer. In addition, you and your wife want to guarantee your new child the best education from preschool through college. So you agree to the following:
For each year in life, $72,000 with a 30 year guarantee and each year it would increase by four percent.
For preschool through high school, you would be guaranteed $24,000 for 12 years also with four percent annual increases.
And for college $50,000 for five years would be increased for inflation of percent.
With a structured settlement annuity the above can be completed with a settlement of $2.5 million. You would be guaranteed an income of $5.1 million. And if you lived to life expectancy, you would receive $8.2 million and again all tax free.
I am not wishing anyone to be faced with a personal injury, but if it did happen, it is important to make prudent decisions and you could have your income replaced with guaranteed raises and the best education for your child all tax free, that would be tremendous peace of mind.

Wahlstrom decries structured settlement kickbacks

SCOTTSDALE, Ariz. (Legal Newsline)-Trial attorneys are pressuring the structured settlement industry to pay kickbacks in exchange for clients, an industry expert said Sunday.Mark Wahlstrom, president of Wahlstrom & Associates, wrote on his blog Sunday that settlement companies are facing "relentless pressure to from some unscrupulous plaintiffs' attorneys."I've always felt that any time we participate in something as shady as rebating or kicking back commissions, no matter how you dress it up or try to justify it, we are devaluing our professional services in the eyes of our customers," he wrote.Wahlstrom, founder of The Settlement Channel, said pay-to-play practices leads to an "endless cycle of professional debasement, deterioration of our profit margins and in ability to invest in other business lines or services to help the end consumer."He said what he finds to be "really upsetting" is the widespread pressure structured settlement brokers have on them to either make contributions to a trial lawyer association or pressure to directly pay kickback commissions in return for writing an annuity for their clients.Wahlstrom noted that he has never been solicited to make a kickback to a trial lawyer nor does he make contributions to plaintiffs' attorney groups beyond the "modest" membership fee, he said."I'm not sure what I find most appalling about this practice of demanding kickbacks from structured settlement brokers, the disgusting ethics of the lawyers involved or the pure stupidity of the settlement professionals who cave in to this pressure and write checks to these ethically challenged bags of dirt," he wrote.He offers some advice to his colleagues in the structured settlement industry. Chief among his suggestions is not to compromise one's integrity."In short, don't sell out. I promise you, you will hate yourself for it later. Most of these brokers who do it, if you look at their lives are a string of fail marriages, broken business relationships, substance abuse and other addiction problems," he said. "They are miserable people pretending they are living a life they can be proud of, but at the end of the day the money means nothing and they are forced to deal with who they really are."

Get Cash For Your Structured Settlement Payments

Settlement Quotes provides quotes for structured settlements.

How do you know your payments are a structured settlement that can be offered for purchase by Settlement Quote’s Certified Funders?
Do you or your beneficiaries receive future payments
From an Insurance Company
As a result of a lawsuit, personal injury or other similar claim
Tax free
Either in the event of your death (guaranteed) or only while you are alive (life contingent)
Not a result of a workers compensation claim
If the answer to these 5 questions is “Yes” and you are an adult then Settlement Quotes can shop your payments to get the highest price quotes in the industry.
See for yourself, get your 6 Price Quotes today:
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Selling your structured settlement is easy with Settlement Quotes and its Certified Funders:
The sale is permitted by State and Federal laws—even if your insurance policy contains anti-assignment language.
Your sale proceeds are Tax Free because the Federal Tax Laws preserve the tax free status of your structured settlement in the event of sale.
Our Certified Funders handle all of the paperwork and get the necessary court approval all at No Cost to you.
Your sale proceeds are paid to you by direct wire into your bank account. You have immediate access to these funds.
The transaction is Risk Free because you are protected by a court process.
Would you like to receive a lump sum of cash for your structured settlement? Thousands of people every month ask us if they can sell structured settlement payments? The answer is Yes! You can sell your future payments for a lump sum of money.
Settlement Quotes will obtain 6 lump sum quotes from competing companies to provide you with the most cash for your future settlement payments. Settlement Quotes will also provide a free analysis of your payment stream.
We will help you receive the most cash possible for your structured settlement. Our main goal is to create competition from our large network of structured settlement funding companies. This competition will reduce the discount rate thereby putting more money into your wallet.
We offer different payment solutions to help you achieve your financial objectives. Whether you would like to sell your entire structured settlement or just part of your structured settlement, we will make it work. Settlement Quotes is here to help any way we can.
Settlement Quotes has become a leader in the structured settlement factoring industry due to our continued support and quotes that we provide for our clients.
If you would like to sell your structured settlement payments please complete the short form on the left or call 888-665-1257. A customer service expert will contact you with your quote for your structured insurance settlement.

Despite Challenging Economy, Woodbridge Investments LLC Continues Buying and Selling Structured Settlements

Woodbridge Investments today announced a 45% reduction in purchasing structured settlement payments from the first quarter of 2008. Company spokesman Scott Schwartz said, "Although the demand is there from customers seeking to sell their structured settlement payments, the present financial condition of the insurance companies and downgrading of their bond and credit ratings has caused rates to rise making the purchase of structured settlement payments more difficult in today's interest rate environment."
Schwartz further added, "Every day more and more articles appear to make our customers want to sell structured settlements and Woodbridge is continuing to purchase structured settlements in spite of the contraction in the economy. A recent customer testimonial stated, "A friend of mine told me that her guaranteed period had expired and she would only be able to receive payments while she was alive. Despite being previously turned down by other companies, Woodbridge was able to buy ten full years of payments, even though they were outside of the guaranteed period. She gave me a toll free number to call, and told me to at least check it out. I am so glad I did..."-Virginia M. MO Woodbridge and its predecessor companies have been helping customers sell lottery payments, annuities and structured settlements since 1993. Woodbridge has helped thousands of people gain access to their future payments. Woodbridge has a comprehensive Free Advice Center for helping people research their choices at its website http://www.woodbridgeinvestments.com

In a Sign of the Economic Times, Value of Structured Settlements Jumps by 25 Percent

In a sign of the economic times, the total value of structured settlements -- in which plaintiffs in personal injury lawsuits accept periodic payments rather than one lump sum of cash -- jumped by 25 percent during the fourth quarter of 2008, compared to the previous quarter, according to statistics from Structured Financial Associates, a structured settlement brokerage firm based in Atlanta.
The fourth quarter's increase, to a total dollar value of nearly $1.8 billion, could indicate the beginning of another significant increase similar to that of previous economic downturns, such as the Internet bust, when structured settlements rose by 40 percent during eight quarters in 2000 and 2001, said Randy Dyer, a consultant in Rockville, Md., and former executive vice president of the National Structured Settlement Trade Association. Dyer spoke about the rise in structured settlements this month to members of the American Insurance Association.
"The largest growth always occurs in a time of economic turmoil," Dyer told The National Law Journal. "I see a real growth in the use of structures in 2009."
Structured settlements provide tax benefits for plaintiffs. In a $600,000 structured settlement, for example, a defendant purchases a financial vehicle, such as an annuity, to provide a plaintiff with periodic payments that are tax free, he said. Although a cash settlement also is tax free, the earnings on that income, once invested, are taxed.
With a cash settlement, a poor investment could obliterate a plaintiff's income from the lawsuit, he said. "The tendency in tougher economic times is to start thinking: 'What is the securest way I can take care of myself and my family?' " he said.