Within a earlier post, we reviewed the key and secondary structured settlement markets and in what way they work. Now, a few of the a growing trend while in the structured settlement industry.
We have a new use for structured settlements in the secondary market that’s becoming more popular. Re-factored annuities are structured settlement payments out of the primary market that happen to be sold through the original payee to a new factoring company. The factoring company then sells the instalments towards websites buyer who package it and re-sells turning out to be a factored secondary market structure towards plaintiff who’s going to be settling personal injury claims. Re-factored annuities have gained attention simply because they can produce rates of return as compared to what’s becoming paid however market.
Factored structured settlements are not the same as primary structures, and plaintiffs plus their advisors should know about the differences are. Tax Matters and Structured Settlements
While primary structured settlements offer some significant tax advantages, which includes tax-free principal and rates of interest, re-factored annuities really do not carry these benefits. They’re accepted as regular investments and will be short sale federal, state and local taxes. Factored annuities may offer a bigger retreat to buyers; however, you will need to calculate your return after taxes when making comparisons along with structures. Transaction Risk in Factored Transactions
Factored transactions are often the outcome of some purchase and sale transactions, belonging to the original plaintiff given that the seller for the new plaintiff for the reason that buyer. This selection of steps adds a part of -transactional- risk that, while minimal, might be of interest because of the final buyer. This risk means that you’ll want to manage a respectable and knowledgeable factoring company when acquiring factored transactions.
Primary structured settlements are set up directly amongst the annuity issuer and payee, so there is mostly a direct contract between your insurance carrier plus the annuitant. This direct connection has no transactional probability of the factored transactions. Creditor Protection in Structured Settlements
Primary structured settlements are shielded from creditors relative to their statutory protections. Even during bankruptcy proceedings, they are usually considered an exempt asset and can’t be accessed by creditors. Stick to structured settlement encounters the group of purchase and sale transactions as being a re-factored annuity, it loses this protection. After that it becomes similarly to other investment and is prepared to take the rights and claims of creditors, bankruptcy trustees along with other claimants. Strategic Capital -Knowledgeable Guidance
All of us that primary structured settlements are a valuable and useful investment to safeguard annuitants and meet their primary financial needs. Change the are convinced that those structures should stay in place provided they are useful to the client. But, when their circumstances change, we desire to help our clients along with their advisors make informed decisions if to trade structured settlement payments.
We do that by taking the right time to schedule an appointment a customer and understand their wants, and after that assist them learn the differences in the number of choices at hand. We help our clients choose wisely one of the different ways to meet their financial should permit them to have the most benefit. Regarding helping clients select how to balance their present and future financial needs, we use our experience for a leading factoring company with knowledge and good judgment to enjoy them.
We’ve been helping our clients since 1994, and prefer to carry on doing this. Get more by sending a voice message to Info@StrategicCapital.com or calling toll free: 1-866-256-0088.
Ric Perez is our Vice-President who oversees clients in the western world and Cam Mears is our Second in command who oversees clients through the east. Ric can be called directly at ric.perez@strategiccapital.com or 1-866-821-6108 and Cam are available directly at cam.mears@strategiccapital.com or 1-866-241-6111.
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Structured Settlements and Re-Factored Annuities – Too Risky
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