Structured Settlements News and Info

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You always hear people talking about the latest investment vehicle they’re using. It’s water cooler talk, dinner table talk, phone talk, it’s everywhere talk. People are always looking for a way to invest their money that might be a little ‘different’ from what others are doing. Buying a structured settlement is one of those options.

A structured settlement is where one party is awarded an amount of money that is to be paid out over a certain period of time. It is commonly the result of an insurance settlement or a life settlement where the insurance company is required by a judge to pay the victims an amount of money over time. The person who is awarded the settlement then knows they can count on $X.XX per month over the next Y years.

However, often people who are awarded structured settlements don’t want to receive the money over Y period of time. They want the money NOW. And why not? Often they can make better use of the money now than they could over 30 years, or sometimes they could better their personal finances right now and forever if they had a lump sum of cash right now for their structured settlement payments.

In comes the investor.

As an investor, an alternative vehicle would be to buy someones structured settlement payments. That’s right, pay cash for structured settlement payments. For example, Joe is awarded a $500,000 settlement from the insurance company for an auto accident he was involved in. The company is going to pay the $500,000 over the next 10 years, $50,000 each year. However, Joe would be better off if he could just get $150,000 now and let someone else receive the payments over the next 10 years. As an investor, you could do this. Of course, in this case you would have to have $150,000 in cash to buy the payments, but then over the next 10 years you would make 333% return on your initial investment of $150,000. Not bad!

I’m not saying it is an easy process to buy someone’s structured settlement payments. The process involves lawyers, insurance companies, and judges, three things people tend to dislike. However, there are companies that can help you. They’ll help you find all the resources you need to make a successful investment.

Good Luck

To Your Success and Happiness


Structured Settlement News and Info
Annuities Blog

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When it comes to discussing offshore anything and US citizens - from offshore trusts to investments, from offshore banking to company incorporation - it’s important to note the following facts: -

- US citizens are taxed on their worldwide income. This includes income from interest, dividends and gains whether onshore or offshore.

- The US government allows money and assets to be moved offshore freely; however it requires full disclosure relating to the amount of money or assets moved and when they are moved.

- The US government has task forces committed to the prevention of money laundering and tax evasion.

- The US government makes it clear that US citizens must comply with all reporting and taxation demands.

So, does this effectively render the offshore world inaccessible or at least useless for US citizens?

No, far from it in fact!

The utilization of offshore trusts and bank accounts can be an excellent way for US citizens to legally and securely protect their assets and themselves from litigation for example.

Offshore trusts offer an individual a fair degree of personal confidentiality, privacy and asset protection from claimants such as an ex-spouse or business client for example; and if properly structured, offshore bank accounts can offer degrees of financial protection from potential future claims as well.

There are many companies and individuals who claim to be able to offer US citizens offshore solutions for taxation reduction or negation purposes. The bottom line is - as stated previously - US citizens are taxed on worldwide income. Therefore it is at best unlikely that the services being advertised will apply to a US citizen and at worst the opportunity will require the US citizen in question to break the law.

So how can offshore asset protection trusts potentially benefit US Citizens?

Any form of asset protection trust - whether onshore or offshore - can be used to protect assets from personal or professional litigation or creditor attack.

Whether established in an offshore jurisdiction or not, most assets protected by the given trust for a US citizen can remain in America. The assets usually remain under the indirect control of the Settlor (the person establishing the trust) as well.

Such a trust will usually be ‘irrevocable’ for a set term, and during that period the settlor will not be a direct beneficiary of the trust.

Depending on circumstances and best advice, many US asset protection specialists favor structuring offshore or foreign trusts in such a way so that they are taxed as domestic grantor trusts.

If the trust is created properly, any creditor or anyone suing the settlor will be unable to reach or claim the assets within the trust.

If the offshore asset protection trust has been structured as an irrevocable trust for a set term, at the end of the term provided there is no current or ongoing threat, the assets can be returned to the control and direct ‘ownership’ of the settlor.

Conclusion

When it comes to the utilization of offshore solutions there are circumstances in which US citizens can benefit from properly structured offshore solutions.

At all times US citizens must be aware that it is their legal duty to comply with American taxation and reporting requirements.

The purpose of effective offshore asset protection planning is the negation of any economic incentive to sue.

Rhiannon Williamson is an experienced publisher who has produced articles for leading travel and tourism guides and financial magazines. Her specialist knowledge about both travel and finance gives her site Shelter Offshore the unique ability to literally cover every single aspect of moving & living abroad - including the often less discussed offshore tax advantages that can be available when leaving our homeland. Check out her website to find out how you can escape from the rat race, relocate overseas, and profit from your move!

To Your Success and Happiness


Structured Settlement News and Info
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Eric Tyson, writes a good article on the Advantages of Structured Settlements.

June 14, 2008, 2:08AM
ADVICE: PERSONAL FINANCE
Structured lawsuit settlements have their advantages

By ERIC TYSON
King Features Syndicate

Q: Our daughter, who is now in college, is soon to receive the proceeds from a lawsuit settlement.

She was injured in an accident, and the payment is coming from the responsible party.

In the latter stages of this process, I’ve heard of a structured settlement that we could receive instead of a lump sum, which we would be responsible for managing. What do you see as the better option?

A: Typically, lawsuit settlements are paid out in a lump sum to the injured party — so long as the injured party is not a minor. While this gets everything settled and enables the recipient of the money to know what he or she is dealing with, managing a lump sum presents challenges over time.

The biggest challenges are knowing how to invest the money and how much of it to use over time to make it last as long as desired.

Structured settlements offer a potential solution to these difficulties.

An awarded lump sum typically goes into an annuity held by a third party (typically a life insurance company), and there must be a clearly defined payment stream that can’t be altered.

So, for example, if the recipient would like a monthly income, but also a chunk of money in five years for a home down payment or anticipated educational expenses, that needs to be planned upfront and can’t be changed later.

In addition to doling the money out over time so it is more likely not to be squandered, a break provided in the tax code (the Periodic Payment Settlement Tax Act of 1982) is another reason to consider a structured settlement. All payouts in a structured settlement, including earned investment returns, are tax-free.

Structured settlements, which can be agreed to only at the time of a settlement, may be done only in physical injury cases. According to a representative for the National Structured Settlements Trade Association (www.nssta.com), structured settlement brokers tend to be financial planners and former lawyers.

The alternative to a structured settlement is to take the lump sum and invest the money on your own.

“There are lots of ways to turn a lump sum of money into an income stream … some are inexpensive, some are costly. There are plenty of conservative-balanced mutual funds that don’t require monitoring. Automatic-withdrawal programs can create an income stream. This approach has a high probability of being successful because it is low-cost and balanced. Investing doesn’t have to be complicated,” says Fran Kinniry of Vanguard Investment Counseling and Research Group.

“You should remember that any form of insurance or guaranteed payment stream creates costs, and this is structured in favor of the company creating product. Remember, insurers are in business to make money.”

Another thing to do is to assess your daughter’s likelihood to be responsible with the money. The downside to a lump sum is that your daughter could quickly burn through the money for whatever purpose she likes. To be fair, a person can waste money received through structured settlement payments, but he or she at least will receive portions of the money over time. You also could establish a trust to be part of a structured settlement, and the trustee could then dispense the money for specified purposes (e.g. educational expenses, living expenses, medical expenses, etc.).

Because of the tax benefits, the further-out payments with a structured settlement can compound and produce somewhat greater investment returns. However, the annuity fixed returns tend to be quite modest. According to broker Michael Kelly with Structured Financial Associates, the returns tend to be a little higher than the current yield on 30-year Treasury bonds. He cites a recent case of a 38-year-old with normal life expectancy getting a 5.4 percent return on a structured settlement annuity.

John Darer, a structured settlement broker with 4Structures.com, also suggests that the broker should disclose his commission, which Darer says typically runs around 4 percent on annuities.

Eric Tyson, author of Let’s Get Real About Money! and Investing for Dummies, receives e-mail at eric@erictyson.com.

To Your Success and Happiness


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When starting a business, a large number of people form an LLC or, to give it its full title, a limited liability company.

The alternative for someone starting up in business on their own is to trade as a sole-trader. There is less formal paperwork involved in going into business as a sole-trader, but a limited company can offer a number of advantages. These include greater opportunities to reduce the amount of tax your business pays, and increased protection of your personal assets in the event of the business running into problems.

This article explains how a limited company is structured, and details the steps you need to take to form your own limited company.

The first thing you will need to do is to decide on a name for your new limited company. Companies House maintains a list of all companies registered in the UK, and you can use their website to check if the name you want is available or whether it is already in use by another company.

Whatever name you opt for will have to have the word “limited” (often abbreviated to Ltd) at the end. So if, for example, your wanted to call your new business “The Ultimate Widget Company” then the full name of your limited company would be The Ultimate Widget Company Limited or The Ultimate Widget Company Ltd.

Your new company will need at least two people to act as officers of the company. One of these people will be the company secretary. The other person will be a director of the company. If you wish, the company secretary can be a director as well, but he/she cannot be the sole director.

The company secretary has certain legal responsibilities such as ensuring that the company submits annual returns to Companies House and that the company and its directors operate within the law.

Many people going into business on their own choose their spouse or another family member to fulfil the role of company secretary. Where two or more people are forming a limited company, one of them will often take on the job of company secretary in addition to being one of the directors of the company.

An alternative is to use the services of a third party firm who provide company secretary services to your business in return for an annual fee.

The next thing to decide is how you will allocate shares in your new company. You will need to specify how many shares your company has and the value of them. Typically, companies are formed with 100 or 1000 shares with a value of £1 per share.

Some or all of these shares are then issued to the shareholders in return for the appropriate sum of money. Ownership of shares gives the shareholders the right to vote at company meetings and entitles them to be paid dividends on their shares based on the profits of the company.

Any shares which remain unsold are known as unallocated shares.

It is a good idea to seek advice from an accountant at this point, in order to make sure that the allocation of shares is done in the most tax efficient way for your own particular circumstances.

The final decision to make before forming your limited company involves the company’s registered office. Under Company Law, all companies are required to have a registered office.

The registered office of a company is the address where official documents can be served and where certain statutory documents relating to the company are kept and can be made available for inspection.

Common choices for the registered office address are either the home address of one of the directors of the company, or the office of the company’s accountants.

Having made all these decisions, you now have all the information you need to form your limited company.

The quickest and cheapest way to form a company is using one of the many online company formation services. For a fee of around £30 to £50 they will process your application with Companies House and send you all the required company documents by email for you to print out. For an additional fee, they will normally provide printed copies of the documents if you wish, but for most people this is not considered necessary.

An alternative to forming the company from scratch yourself is to buy what is known as an “off the shelf company”.

Off the shelf companies are companies which have been formed already by a company formation agent, but which have not yet traded. You pay a fee to the formation agent and they then transfer ownership of the ready-formed company to you.

Obviously, with an off the shelf company you are restricted on your choice of name for your company, as you can only pick from the list of pre-formed off the shelf companies that the formation agent has available at that time. However, once you have bought your company you can apply via Companies House to change its name, but there is a fee for this.

As off the shelf companies tend to work out more expensive and less flexible than forming the company yourself, it makes sense in the majority of cases to form the company yourself using one of the online formation services.

To Your Success and Happiness


Structured Settlement News and Info
Annuities Blog

The Internet Real Estate Center