structured

What Do Factors Do?

The term 'factors' might be a little confusing to the layperson. Typically, the word is used in the sense of causative factors that lead to some result. In the financial world, however, factors are like bankers, a class of financiers. Factors buy future payments from present recipients and pay them a discounted sum as the price of the payments. They then collect the payments direct from the payers in due time. This works because the original recipient is legally able to assign the right to receive payment to the factor.

Traditionally, factors bought 'accounts receivable' from business entities that sold on credit. The business might have to give credit to increase sales volumes. However, the business could do with immediate cash for its operations. In such a situation, the accounts receivable were assigned to a factoring company that paid a discounted sum as immediate payment.

With the increasing demand from structured settlement recipients for immediate cash, a new class of factors, known as structured settlement factors, have appeared in the market. These factors buy future payments under such settlements and pay the recipients a sum based on the 'present value' of those payments.

What Do Discounting and Present Value Mean?

The terms 'discounting' and 'present value' relate to the 'time value' of money. Money in hand today has more value than the same amount received at a future date. If you have 1000 dollars in hand now, and invest it in a security that pays 6% interest every quarter, your 1000 dollars would become 1061.36 dollars at the end of one year. It is assumed that you don't take out the interest, instead allowing it to be added to the principal at the end of the quarter. Next quarter's interest would then be computed on this interest-added principal.

The above case is an example of compound interest. Compound interest could make even small sums into big sums over the course of many years. Discounting is always done at a particular rate of interest. The discounted value of a future payment is what we call present value. In the above example, if you receive 1061.36 dollars at the end of one year, its present value would be 1000 dollars. There are formulae, and readymade tables, to compute present values of sums received at any future date. The structured settlement factor discounts each of the future payments that you are selling, and total them up to arrive at the present value of the payments. They would pay you a sum based on this present value.

Can You Just Go to A Factor and Sell Your Structured Settlement?

Unfortunately, the process of accelerating your cash receipts by selling future payments is not a simple one. Structured settlements are considered socially more desirable because people tend to dissipate large sums in wasteful ways. Hence, laws have made it a complicated process to accelerate the payments.

Typically, you would need permission from a court to assign your future payments to a third party. Before giving such permission, the court would look at all relevant aspects and determine whether the sale is in your best interests. The court process takes a little time.

There would also be a lot of negotiations between you and the structured settlement factor. You seek the help of your attorney for the negotiation. In some states, it is mandatory to involve an attorney. These too take some time. Assuming everything goes well, you could get your money in about four to six weeks.

Chances of court approval and quick conclusion are brightened if you deal with an experienced structured settlement factor, who deals with you ethically and up front.

For more read at http://www.structuredsettlements.bz

Annuity payments are paid through structured settlements over a specific period of time. This type of financial arrangement typically evolves from an insurance settlement or jackpot lottery winnings. Payments are usually distributed monthly, quarterly, semi-annually or annually. If a structured settlement is arranged for a minor, oftentimes annuity funds are placed in a trust.

The person who receives annuity payments is referred to as the Annuitant. Payments are paid to the Annuitant through a life insurance company. Structured settlement annuity payments are not subject to income tax when the money is received as the result of physical injury. However, if the payments are derived from lottery winnings, distributions might be subject to both federal and state taxation.

Structured settlements are complex matters and require the services of a lawyer or individual who specializes in this field. These legally binding contracts are oftentimes used in cases of medical malpractice, workplace injuries, automobile accidents with serious injuries, or injuries caused by negligence.

Regulated under the Structured Settlement Protection Act, structured settlements are a safe and practical financial arrangement. Annuity payments provide individuals with consistent income to pay for living and healthcare expenses, prescriptions, rehabilitation services, etc.

Structured settlements are popular because they create a win-win situation for all parties involved. The Annuitant receives consistent income and the Defendant avoids having to pay a lump sum cash settlement. Instead, the Defendant is able to pay installment payments over time. The annuity is guaranteed by the insurance company who issues it.

Once structured settlement documents are signed the agreement cannot easily be altered. Therefore, it's crucial to make certain every detail is thoroughly covered before signing on the dotted line. Due to the nature of this type of arrangement, it cannot be stressed enough to work with a reputable professional when constructing a structured settlement.

If an Annuitant desires to obtain early distribution of funds the only option is to sell annuity payments to a lending institution or private investor. Investors can purchase partial or entire structured settlement annuity payments.

When selling partial payments, the Annuitant retains control of the structured settlement. For instance, if an Annuitant receives $25,000 a year for 20 years and is in need of $50,000 cash, he can sell two years of payments to the investor. Payments are transferred to the investor until the amount is paid in full. Afterwards, payments revert back to the Annuitant.

Before selling annuity payments it is crucial to engage in due diligence and ensure you are working with a reputable individual or organization. Check with the Better Business Bureau, conduct investigative research via the Internet, contact referrals and when possible, meet with the individual in person.

Last, but not least, it's important to note not all states allow the sale of structured settlements. Be certain to check your state's laws prior to selling annuity payments. It typically takes two to three months to close a structured settlement sale. Therefore, if you know you will be in need of cash and plan to sell annuity payments to obtain it, do not wait until the last minute.

Structured settlement payments are a type of payment a party receives upon receiving a favorable decision during legal proceedings. As part of the courts ruling, one party is ordered to make financial compensation to the other party. Often times, the amount of the compensation awarded is spread out over time. Structured settlements are payments arranged in this fashion.

Many people choose to receive a structured settlement payment over time instead of a lump sum payment if they know then will need cash payments for expenses in the future. Also, the court will sometimes award structured settlements on behalf of the party required to make the payments. Setting up payments like this has the benefit of guaranteeing payments over a long period of time to the person receiving them, and lessening the financial hardship of the party required to make the payments.

People receiving structured settlements have the option of selling their entitlements to third party companies. When they do this, a company will purchase their settlement contract for less than the total value, and usually offer a lump sum payment. If, for instance, a person were receiving $100 per month for the next 60 months, or $6,000 total, a company could offer to pay the individual a lump sum payment of $5,000. The individual will receive less total money overall than if they chose to continue to collect their payments over time, but they will have $5,000 immediately instead of having to wait for the next 50 months to have that same amount of money.

Structured settlement companies make their profit by purchasing the structured settlement for less than the amount that they will collect. People choose to sell their settlements for a variety of reasons, including:

Making down payments on large purchases
Purchasing a car
Paying for education.
Buying a house

There are a ton of reasons one would elect to sell their payments in order to receive a large, immediate lump sum payment. Structured settlement transactions must meet strict guidelines and legal restrictions in order to be completed successfully, and for this reason it is best to secure the services of a reputable structured settlement company before making any decisions.

Silent auction fundraisers have become popular in raising money for schools, churches, sports organizations and other non-profit groups.

If properly structured, a silent auction fundraising event has the potential to raise money - real good money!

The first step in planning any type of event is to select a Chairperson. It is up to the Chair to oversee every aspect of the fundraiser and ensure everything is on track and running smoothly.

The Chair should hold frequent meetings to ensure volunteers are well informed and up to speed with their duties. A good rule of thumb is to lead by example! If the Chair is organized and has everything under control a profitable fundraiser will be the end result.

Having selected a Chairperson, it is now time to form sub-committees. Typical committees could include the following, but will vary with individual organizations. For example, Ticket Sales & Marketing could be divided into two groups depending on the organization's requirements and resources.

Ticket Sales & Marketing:
Ticket design, printing, pricing, distribution, advertising, sponsorship options and payment details.

Acquisitions:
Canvassing and collection of auction items, introductory letter, auction donation contracts, bid sheets, item categorization and proper item displays.

Venue Decorating:
Specific theme, subject or colors.

Special Guests/Entertainment:
Emcee, keynote/guest speaker, musical entertainment, guest appreciation ideas and crowd participation games.

Food & Beverages:
An integral part of any event!

Remember - if the Chairperson and sub-committees are diligent with their responsibilitie and duties, all your hard work will pay off - literally!

It is not uncommon for people who are beneficiaries of a structured settlement to sell some or all of the settlements for a cash payout. The reasons for selling a structured settlement vary but the process for obtaining cash for a structured settlement is the more or less the same across all states in America.

There are many settlement-purchasing companies that offer a number of plans for buying a structured settlement and offer an instant cash payout. The plans offered by these companies are useful for obtaining a lump sum for repaying debts, financing college education, or availing a business opportunity. Since there are many financial companies that purchase settlements, it is in the best interests of the seller to seek advice from his attorney and financial advisor before deciding to do business with a particular structured settlement company.

An online research should yield details on a number of structured settlement companies that one can visit online. The key factors that decide the choice of a structured settlement buyer include the rate of interest charged, the buyer s financial standing, buyer s reputation for fair-dealing, and his relationship with the insurance companies or the actual payers of the structured settlement installments. Since the cash payout is less than the value of the settlement sold, one should actively seek out a buyer that offers maximum cash payout for the settlements sold. Costs incurred in the sale of a structured settlement also include service fees, closing fees, broker fees, and legal expenses.

The responsibility of getting the best out of the sale of structured settlement lies with the seller. This means he has to be aware of the minimum waiting period, if any, that the state may impose on the sale of a structured settlement as well as other state and federal regulations that govern the sale of a structured settlement.

A written court order approving the sale of structured settlements is necessary for the seller to receive the cash payout. Court approval is subject to the seller being able to prove that the sale is the best means available to him for achieving liquidity. Brokers who are knowledgeable about the court procedures involved in the sale of structured settlements can offer useful help to the seller and his financial advisor. The entire process of obtaining a cash payout can take up to sixty days and includes submitting an application to the settlement buyer, signing of the closing documents by the two parties, and the legal formalities.

Individuals who are beneficiaries of a structured settlement can exchange their installments for a cash payout if they so wish. The need for quick cash can be fulfilled with the help of structured settlement companies that give a cash payout on structured settlements.

The important issues to keep in mind when considering a cash payout include the acuteness of the need for quick cash and the minimum ready cash that will suffice. This is because structured settlement companies charge a fee and along with other costs, such as legal expenses, incurred in the process of selling a structured settlement the lump sum that one receives can be more than 15% less than the value of the settlements sold. There are a number of structured settlement companies with a strong online presence. One should research the credentials and the payment policies of these companies. A comparison of buyers helps to narrow down the choice to those who offer maximum cash payout on a structured settlement and also appear to have the necessary skills and contacts to negotiate smoothly with insurance companies.

Financial advisors and brokers have a role to play in the sale of a structured settlement. Financial advisors offer valuable advice on the tax implications and the impact of the sale of settlements on one s resources. Brokers act as intermediaries between buyers and sellers and because of their contacts they are in a position to introduce a seller to the most appropriate buyer for his requirement. Brokers can also offer useful advice for managing the legal process for selling a structured settlement. This is because the sale of structured settlements is subject to federal and state laws.

The entire process for selling a structured settlement for a cash payout can take up to sixty days which includes the application procedure, the presentation of the closing documents by the buyer, and the legal procedure. The legal procedure involves an assessment by the court of the genuineness of a seller s needs and whether selling a structured settlement is the best option available. The court approves the sale only when it is satisfied that a cash payout is in the best interests of the seller and his dependents. A court-approved sale is tax exempt for the buyer and the seller. A cash payout for a structured settlement without a court approval can invite hefty punitive taxes.

If you have ever gone through an extended trial or won a lottery where you were awarded payment, you are likely familiar with the concept of structured settlement payments. A structured settlement payment simply means that rather than getting your money all at once, the debtor is required to pay what you are owed in installments rather than in one lump sum. In this way, the structured settlements can be filtered out over time, coming at regular intervals.

The way a structured settlements works is basically two parties agree upon a specific plan to pay an eventual amount in small increments over time. Over this fixed span of the elapsed time, the individual will repay a certain amount or award a sum equal to the original sum arrived at by both parties.

In a structured settlement there are likely many documents assigned to the settlement case including an annuity policy, a court order, an annuity application and a qualified assignment as well as an agreement between the parties. The payments for the considered settlement can vary from all manner of lump sums and installments depending on the agreement between the affected parties.

Both parties choose the length of time that the structured settlements will span, as well as the individual policies and regulations governing the structured plan. As structured settlements are paid out over the years, the parties are made privy to the inner workings of the arrangement, so as best to affect the repayment or initial payment of the settlement.

Structured settlement payments are tax-free by nature and cannot be counted towards overall income and are guaranteed by contracts. This contract guarantee ensures that the settlement payee will be guaranteed a settlement payment at regular intervals from the payee. It is important to understand all the issues involving settlements before you choose such a payment plan. There are many state and federal laws that cover the institution of the structured settlement payment plan that allows for the repayment and record keeping throughout the life of a settlement payment plan. Following these state and federal laws can be a difficult matter as it may require additional study and preparation to prepare for.

Before any structured settlement can take place, a disclosure statement must be made ready for the perusal of the customer ahead of time, generally at least three and as many as fourteen days before consummation. This early notice gives the customer plenty of time to decide exactly how to go about initiating the structured settlement payment plan. Users are advised to locate and retain an attorney before attempting to structure a settlement plan.

Structured settlements are offered for a variety of reasons. It is possible for recipients of a structured settlement to trade them for cash flow so as to meet any immediate liquidity requirements such as debts or medical expenses.

An analysis of one s needs with the help of financial experts usually provides insight into the amount of cash flow necessary. The cash flow for a structured settlement depends upon various factors such as the total settlement amount and the financial rating of the insurance company. Also, buyers may have terms and conditions that restrict certain categories of structured settlement beneficiaries, such as minors, from selling the settlements for a lump sum.

Future structured settlements can be sold for lump sum payments without tax liabilities to either the buyer or the seller. Financial institutions that buy structured settlements in return for cash flow can be found on the internet. These companies offer free quotes that are useful in comparing the net lump sum. Information required to obtain free quotes includes the name of the insurance company, state of residence, and the amount of structured settlement. One should also go through the FAQ section of these sites and get an idea of the issues commonly faced by those who wish for a cash flow in exchange of a structured settlement. Settlement companies offer various plans. One should look for a plan that offers the best value for the sale of structured settlement.

Documents required for negotiating the contract include copies of the settlement and the policy. Before the contract is signed, the buyer sends a disclosure statement to the seller which mentions the lump sum and the deductibles. The seller can avail the cash flow only after a court approves the sale of the structured settlement and considers the sale to be in the best interests of the seller and his dependents. The entire process including the court hearing can take up to sixty days.

One should check the credentials of the buyer with respect to his payment records, fair-dealing, and relationship with the insurance companies. The last mentioned is very important as buyers with smooth working relationship with the insurance companies can help one to get cash quickly. Of course, the bottom line is the cash flow offered in exchange of the structured settlements. This depends on the rate of interests charged by the various buyers.

Consumers choose to sell their legal settlements (also referred to as structured settlements) for many reasons. While many sell their payments to help with college tuition, debt reduction, medical expenses or mortgage payments, most people sell their settlement to gain financial flexibility when personal or financial needs change. “The long payout periods of most structured settlements – typically up to 30 years – work well for many holders, but not all,” said Andrew Torre, Chief Compliance Manager for J.G. Wentworth. “Many people find that they need access to their money now to pay for legitimate needs.”

However, consumers often are unaware of their options when selling their structured settlements. What price is too low? Which company is reliable? Can I sell just part of my settlement? These are just some of the many questions that arise when considering selling your structured settlement. Torre recommends doing thorough research ahead of time. He offers these 5 tips to consider before selling a structured settlement:

1. Search for specialty finance companies that are able to purchase your structured settlement. Be sure to research their reputation and testimonials – what clients (past and current) say is invaluable.

2. Torre recommends not accepting the first offer to purchase your policy. Why? Browse multiple companies to make sure you’re getting the most value for your settlement.

3. Evaluate your current financial standings, and then decide whether you need to sell all or part of your structured settlement.

4. If you can’t understand the legal jargon, consult an attorney. Make sure you understand the documents and any tax ramifications that occur with liquidating your structured settlement.

5. Evaluate your financial obligations that will accrue in the future. Re-consider whether selling all or part of your structured settlement will be beneficial for you. Also, consider how accessing your assets will affect your income.

Bonus: Additionally, before you sell your structured settlement, be sure that the company you’ve chosen addresses all legal ramifications, Torre adds. Prior to purchasing policies, J.G. Wentworth seeks approval from a judge who examines the appropriateness of the transaction, including state legislation.

It is not very difficult for a person who has acquired a structured settlement to trade it for cash. Irrespective of the source of the structured settlement, whether from an insurance claim or an out-of-court settlement, a good factoring company can help in obtaining cash for a structured settlement.

The factoring companies give a lump sum to an individual and become beneficiaries of the periodic payments. The lump sum is given minus the factoring companies fees which can be up to 15% of the total amount. The amount can be used in a number of ways to accomplish objectives such as repaying debts, buying a vehicle or a house, or funding education. It would not be possible if the money was made available in installments. At the same time, one should sell structured settlements only for meeting genuine requirements and not perceived ones.

A person wishing to sell his structured settlement should decide upon the amount that he wishes to sell giving due consideration to the genuineness of his need and his future requirements. Prospective sellers should shop online for the most appropriate factoring companies so that they can get the best price and terms for their structured settlement. It is possible to get free quotes online that give a basis for comparing settlement firms. One should also try and get an idea of the company s reputation for fair-dealing, technical competence, and prompt payment.

A person desirous of selling a structured settlement can also do so by contacting a structured settlement broker who can apprise the seller of the best offers available. The seller should be proactive in keeping himself informed regarding any developments with respect to the sale of his settlement; he should also be aware of the responsibilities of the broker and the buyer as well as the steps that need to be carried out to sell the settlement. At no stage should a seller allow himself to be pressurized into making a deal which he is not comfortable with.

The process of selling a structured settlement can take up to two months. Some states in the United States have a minimum waiting period before a structured settlement sale can go through. The obligations to be fulfilled vary with the state and one should be aware of requirements as per state law. A court will decide whether the sale of a settlement is in your best interests. The court procedure involves submitting relevant documents and when these are approved, a date for the sale of the annuity is given by the court. A court-approved sale of annuities is exempt from taxes.

Sometimes when a plaintiff settles a case for a large sum of money, the defendant, the plaintiff's attorney, or a financial planner consulted in association with the settlement, will propose paying the settlement in installments over time rather than in a single lump sum. When a settlement is paid in this manner it is called a "structured settlement". Often the structured settlement will be created through the purchase of one or more annuities, which guarantee the future payments.

A structured settlement can provide for payment in pretty much any schedule the parties choose. For example, the settlement may be paid in annual installments over a number of years, or it may be paid in periodic lump sums every few years.

Potential Disadvantages of Structured Settlements

Some people who enter into structured settlements feel trapped by the periodic payments. They may wish to purchase a new home, or other expensive item, yet be unable to muster the resources because they can't borrow against future payments under their settlement.

Some people will do better by accepting a lump sum settlement, and investing it themselves. Many standard investments will give a greater long-term return than the annuities used in structured settlements.

Selling a Structured Settlement

If you have a structured settlement, you may have been approached by a company interested in purchasing your settlement, or may be curious about selling your settlement in return for a lump sum buyout. About two thirds of states have enacted laws which restict the sale of structured settlements, and tax-free structured settlements are also subject to federal restrictions on their sale to a third party. Also, some insurance companies will not assign or transfer annuities to third parties, to discourage the sale of structured settlements. As a consequence, depending upon where you live and the terms of your annuities, it may not be possible for you to sell your settlement.

Keep in mind that companies which buy structured settlements intend to profit from their purchase, and sometimes their offers may seem quite low. You may benefit from approaching more than one company in relation to the sale of your settlement, to make sure that you obtain the highest payoff. You also want to be sure that the company which wants to buy your settlement is established, well-funded, and reputable - you don't want a fly-by-night outfit to obtain the rights to your annuities but to disappear or go bankrupt before paying you the buyout money. You may have to go to court to get a judge to approve the buyout. It is usually a good idea to consult with a lawyer before entering into an agreement to sell your settlement.

Special Considerations

Any person entering into a structured settlement should be on guard for potential exploitation in relation to the settlement:

Excessive Commissions - Annuities can be highly profitable for insurance companies, and they often carry very large commissions. It is important to ensure that the commissions charged in setting up a structured settlement don't consume an inappropriate percentage of its principal.

Overstated Value - Sometimes, after negotiating a particular settlement figure, the defense will overstate the value of a structured settlement. As a result the plaintiff, in accepting the settlement, in fact obtains a significantly lower dollar value than was agreed upon. Some defendants have nominally paid the full amount of the settlement, knowing that they would later obtain significant rebates from the annuity companies they used. Plaintiffs should consider compariing the fees and commissions charged for similar settlement packages by a variety of insurance companies, to make sure that they are in fact getting full value. A plaintiff may wish to make it a condition of the settlement that the defendant will actually pay the full value of the settlement in setting up the structured settlement, and that any rebates received by the defendant for annuities included in the settlement be payable to the plaintiff.

Self-Dealing - There have been cases where the plaintiff's lawyer is also in the insurance business, and sets up a structured settlement on behalf of a client without disclosing that the attorney is purchasing the annuities from his own business, or is pocketing a large commission on the annuities. Similarly, there have been situations where the plaintiff's attorney has referred the client to a particular financial planner to set up a structured settlement, without disclosing that the financial planner will be paying the attorney a referral fee in relation to the client's account. Make sure that you know what financial interest, if any, your lawyer has in relation to any financial services sold or recommended by the lawyer.

Life Expectancy - It is unfortunate, but many people who receive large personal injury or workers' compensation settlements will have a shortened life expectancy as a result of their injuries. It is important to consider life expectancy in association with any structured settlement, and to consider whether it is appropriate to enter into an annuity where payments will cease upon death. Sometimes it will make sense to insist upon an annuity that pays a minimum number of payments, or one that will pay a balance into the plaintiff's estate, such that the value of the settlement is not lost to an insurance company upon the plaintiff's untimely death.

Using Multiple Insurance Companies - For larger settlements, it often makes sense to purchase annuities for a structured settlement from several different companies, dividing the settlement between those companies. This can provide you with protection in the event that a company that issued annuities for your settlement package goes into bankruptcy - even in the event that one of the companies defaults in part or in full on your settlement payments, you would still receive full payment from the other companies.

Additional Resources

• Selling Your Structured Settlement - The costs and benefits of selling a structured settlement.
  
  
• Cash Payment For Your Structured Settlement - What should you consider before selling your structured settlement?

If you have been awarded a structured settlement payment and have some input in how the payment schedule will be structured, here are some tips to help you make intelligent suggestions that are in your best interests.

One of the key factors in how frequently you would like to receive a payment from the structured settlement has to do with what the money needs to cover. As an example, if you are receiving compensation because of an accident where you were injured, you may need those payments to be set up on a monthly basis. The idea is that you may have medical bills or require some sort of ongoing treatments or home care that will need to be paid from the settlement. If this is an accurate picture of your situation, then ask for monthly payments that will cover your expenses related to the accident.

For situations where your settlement is taking place because of some sort of civil matter you have won, you may want to ask for payments from the structured settlement that occur on a semiannual or annual basis. The idea here is that you do not need the money in order to meet medical costs or even to take care of your usual household operations. However, you can take the larger payment and invest it in some manner. Rolling over the larger structured settlement payment into an IRA or other program may protect you from having to pay taxes until you actually begin to withdraw the funds. If you do not need the money from the settlement to take care of ongoing expenses, then get a larger payment less frequently and invest it in your future.

Your circumstances dictate how often it would be helpful to receive a structured settlement payment. Look closely at your needs and make sure that you understand which if the payment and investment options would do for you, and when you would reap the most benefits. At the same time, keep in mind what you need today as well as what you may need in the coming years, taking into consideration other income sources you have available to meet those needs. The point is to be well informed not only of your options, but how you can use the resources to best advantage. Once you are armed with a thorough understanding of what is in your best interests, ask for payment terms that will reap the most benefits for you both now and in the long run.