Using structured settlements in personal injury cases is common. Use a resolve in workers’ comp claims where an employee is permanently disabled- less so.
A new investment product is showing up at settlement conferences. Often referred as “refactored annuities” or “secondary market annuities,” these are made up of structured settlement payments that have been previously transferred by an injured party to a factoring company, and then either sold individually, or are pooled and sold as repackaged structures in the secondary market.
The business model for a litigation law firm is often fraught with uncertainty — periods of big wins and big payouts as well as slow times with little or no income. One tool to even out cash flow, better manage the ups and downs of a litigation practice and prepare for an attorney’s future financial needs is structured attorney fees.
Sometimes, life throws us curveballs that we can never expect or prepare for. Such was the case for Russ, one of my clients. Russ’ wife was in a terrible auto accident in 1996 and it turned their world upside down. This is a story about how a structured settlement helped him get through his family’s nightmare.
A recent article in The Wall Street Journal painted a bleak picture for those who have or are thinking of acquiring long-term care insurance. Premiums are soaring to the point that they have become unaffordable to many seniors. Insurance companies are nearly doubling premiums after realizing they had charged too little when the policies were introduced in the 1980s and 1990s. Insurance carriers have lost money and are leaving the market after widely underestimating the speed in which healthcare costs would rise, how long seniors would live and how many would actually use the premiums.
While low interest rates are good for the economy, the anemic rates are frustrating for individuals who rely on interest payments as an important part of their income. Investment decisions can become confusing. However, for injured parties who must be sure they have enough money to pay for current and future medical bills and other living expenses, the decision remains easy.
Extra planning is particularly needed by parents of children receiving a financial settlement due to injury and who are approaching college age.
Structures are used in a variety of injury cases. The most common involve wrongful death, (especially if a surviving spouse or children need income), temporary or permanent disability and severe injuries with shortened life expectancy.
The most common way for a plaintiff to continue to receive Medi-Cal and SSI while also receiving settlement funds is to establish a first party individual Special Needs Trust (SNT) or enroll in a Pooled Special Needs Trust (Pooled SNT) also known as a Pooled Trust, PSNT or Master Trust.
Over the past 20 years, more than 50 percent of the structured settlements facilitated by Ringler Associates, a national structured settlements brokerage firm, were less than $50,000. Another approximately 17 percent were between $50,000 and $100,000. These figures are typical of most annuity brokerage firms.
