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Structured Settlement

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How To Make Your Structured Settlement Money Last Longer

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If you are due to receive a significant payout due to a personal injury, workers’ compensation claim, wrongful death or product liability case, the financial decisions you make with your attorney will determine your life for many years to come.
Claimants will often be given the choice to take their settlement as a lump sum or to accept a structured settlement. This is an arrangement whereby you will receive the money – in the form of lump sums or regular payments – on a fixed schedule.

So which should you choose?

Why People Struggle with big Payouts

According to the National Structured Settlement Trade Association, only a third of claimants offered a structured settlement actually go that route. The others are presumably confident they can manage a large lump sum of money over the whole course of their lives.

Some of them can but there is a well-known anecdote which says that those who come into money fast tend to lose that money equally quickly.

Although every person and every circumstance is different, evidence indeed shows that those injured people who go on to recover from their injuries struggle to hold on to that money. Evidence from the Rutter Group revealed that 25 to 30% of injured settlement beneficiaries dissipated their lump sum within just two months of recovery. 90% of those beneficiaries had run out of cash within five years.

There are various reasons for this situation. They include listening to bad financial advice; giving overly generous handouts to family and friends; having a lack of financial discipline and having a deficiency of knowledge and wisdom in how to manage significant sums of money in both the short and long term.

Proper planning would need to take into account all future possibilities like providing for college fees and retirement income. It can be very difficult to foresee what your life and financial circumstances will be far into the future which is why setting up a structured settlement is a good way of making sure you will have at least some guaranteed income.
On the other hand, this is also why some people end up struggling to make ends meet. Their circumstances change and the rigid payment schedule of their structured settlement proves to be incompatible with their needs.

Understanding the Advantages of Structured Settlements

Structured settlements provide a way to secure a claimant’s future financial health by creating a contractual obligation for an insurance company to make lump sum and/or periodic payments to a defined schedule. It protects the claimant from inadvertently damaging their future financial wellbeing.

One of the biggest advantages of structured settlements is their tax-deferred status. This fact can often provide greater returns than those suggested by the headline interest rate of investment vehicles such as stocks and shares. The tax due on such accounts compounds over time adding up to a significant sum.

Security is another key benefit of structured settlements. The insurance companies underlying structured settlement annuities are A+ rated and subject to scrutiny over solvency and regular audits. This protects annuitants’ future payments in all but the most severe economic circumstances.

It is important to understand that once your decisions have been made and the structured settlement deal passed into law, it becomes impossible to manage structured settlement money directly. You are tied into the deal unless you decide to sell your structured settlement further down the line (more on that later).

Consequently, a balanced approach is often best with a lump sum taken immediately to cover any large payable sums (for home adaptation, new vehicles, paying medical bills, clearing debt, etc.) and a structured settlement set up for security in the future. People may also want to consider setting some extra money aside for investment into corporate grade bonds, U.S. securities, a no-load mutual fund or some other investment vehicle or selection of vehicles.

The details of this balance are best discussed with an independent financial advisor as all circumstances are unique.

General Budgeting Advice

If you’ve decided to take the secure option of a structured settlement, that doesn’t mean you will necessarily need to struggle while you wait for payments to be due. Learning sound budgeting habits will stand you in good stead for the future.

Budgeting doesn’t have to be as daunting as it sounds, especially with the large number of apps that are available now to help you (Mint, Clarity Money, etc.) There are different budgeting systems out there, including the envelope system, the zero budget and the 50/30/20 budget. There is plenty of information about these online.

A powerful tip if you are due to receive irregular lump sums is to behave as if you never received the extra funds. It is natural to want to loosen the belt when you get an influx of money, especially if you have been living from pay check to pay check, but the danger is that you will overspend and blow the money. Sticking with your chosen budget will help you to keep your day-to-day spending modest, leaving extra money for savings.

Another way to reduce expenditure is to maintain tight control over insurances and utility bills. Insurance companies often reserve their best deals for new customers but if they know you are considering your options they will often be able to cut you some slack. If not, there are plenty of comparison sites out there. Just be sure you are clear on what cover you need. While you’re at it, compare your utility bills (gas, electric, water, etc.) Be particularly careful about rolling onto an expensive tariff when your contract ends.

No matter how good your budgeting, life circumstances can mean that you need to access your structured settlement cash early. As we mentioned above, you do have the option to sell your structured settlement to a settlement buyer like New Leaf Structured Settlements.

Cashing in your Structured Settlement Payments

How do you go about selling your structured settlement? The first step is to speak to your family members and perhaps an independent financial advisor to make sure that your decision is in your best interests. A judge will only allow the sale process to proceed on that basis so it is worth being clear from the start.

Next, you will need to get one or more quotes from structured settlement sellers to find the best deal. New Leaf Structured Settlements guarantee to give you the best deal by at least $1000 so we recommend you call us on 1-800-517-7671 or fill in our form for a fast response.

If you are happy with the quote we give you, our experienced team will go through the sales process with you and the issuing insurance company, assisting you with the necessary paperwork. The final stage of the process will involve approval from a judge which normally requires a face-to-face meeting.

Finalizing the sale can take a number of weeks which is why New Leaf Structured Settlements offers the option of a cash advance which can see funds in your account within a few hours of the agreement being made.

Placing your settlement funds into a structured settlement annuity is one of the best ways to make your money last longer while avoiding the temptation to spend on non-essentials or risky, tax-bearing investments. However, that doesn’t mean you have to put up with hardship should circumstances change. New Leaf Structured Settlements are here to help you liquidize that asset if you ever need to do so.

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Selling Your Annuity Could Help You Retire

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Annuities have been around since Roman times and really took off during the Great Depression. Now, as pension plans become less common, annuities are becoming popular again as a way to ensure a guaranteed income during retirement.

However, some of these annuitants are now selling off their annuities. This article looks at what an annuity actually is, when it might make financial sense to sell an annuity and how you can sell your guaranteed or investment annuity (or even your guaranteed or life contingent structured settlements) to New Leaf.

Strange as it may seem, sometimes, selling your annuity before it matures can even help you retire.

Here are the answers to four common questions about selling annuities:

What is an Annuity?

An annuity provides a way to manage your income so that you can receive regular payments at a future time. In 2014, the Treasury passed new regulations which allowed employees to use up to a quarter of their 401k or IRA allowance to purchase longevity income annuities (LIAs) and many workers took advantage.

Annuities are often misrepresented as investment vehicles. They are more accurately described as contractual income guarantees and come in many different shapes and sizes, depending on the annuitants goals. Annuities are designed to be customizable, providing lump sum payments or periodic monthly, quarterly or annual payments as preferred.

Unlike other insurance products, annuities are not funded indefinitely. Instead, they are structured in two phases. The annuitant pays premiums during the accumulation phase and then collects payments during the payout phase.

Just like a 401k or IRA, annuities are tax-deferred. However, it should be understood that they do not confer additional tax benefits so it is usually best to max out the other two accounts before paying for an annuity.

There are three main categories of annuity: fixed, variable and indexed. Fixed annuities give you principal protection. Unlike other options, you will receive payments at a guaranteed rate of return at the schedule agreed at the outset.

Variable annuities are higher risk as it is possible for your future payments to lose value if the funds (normally mutual funds) into which they are invested perform badly. However, it is possible to pay extra for minimum guaranteed payments by purchasing a rider. Indexed annuities are another way to guarantee minimum returns while making a bit extra. Since indexed annuities are linked to established exchanges (e.g. the S&P 500), it is likely that annuitants will enjoy some growth although rates of return are unlikely to be high.

If you are considering buying an annuity, it is important to understand that they are not suited to short-term investing. In fact, misconceptions about this are a common reason why some people decide to sell them on.

Why Would I Want to Sell my Annuity?

There are two main reasons for wanting to escape from an annuity contract. These are a change in financial circumstances and a misunderstanding about what an annuity is and does (and does not do!)

According to the U.S. News, annuities are “among the most commonly misunderstood and misused financial products.”

As already mentioned, one common misconception is that annuities provide a good rate of return. In reality, their value is more in the security they provide. Due to the numerous fees that annuities include, rates of return are usually disappointingly low. When annuitants realize this they are sometimes tempted to reinvest the money in something with higher growth potential (a business, a property, stocks and shares etc.). This can actually help them to retire earlier than they would have done as they replace low value income streams with potentially higher value ones.

It is possible to cash out your annuity early but sometimes people decide to sell their annuities to a company like New Leaf instead. Why would they do that?

The answer is often to do with surrender fees. As mentioned above, annuities are contracts designed as long-term investment vehicles so if you cash out early, you will almost certainly be hit with a hefty surrender fee. Surrender fees usually apply from between five and eight years following the purchase of the annuity. They are normally designed to be steep at the outset (often more than 10% of the remaining payments) and to reduce as time goes on.

However, when you transfer your rights to receive annuity payments by selling your annuity, those fees are not applicable. You will therefore need to compare the discount rate on offer from the buyer with your exposure to potential surrender fees to make the final decision of whether to cash out or sell.

How can I Sell my Annuity to New Leaf?

If you do decide to sell your annuity, our professional and experienced teams can give you all the support and advice you need. If you fill in our form, we can get a quote back to you in a couple of minutes. We promise not to hassle you as we understand that selling an annuity is a big decision and you will want to discuss the implications with your family and financial advisor.

If you decide to go ahead with New Leaf, we will then need to liaise with the issuing insurer. Every state has different regulations but we are used to dealing with insurance companies from all over the country.

You will be required to fill out various pieces of paperwork and provide ID so the more prompt you are with this, the sooner you will receive your money. Don’t worry; we can walk you through anything you are unsure of.

Can I Sell my Structured Settlement?

Yes you can if a judge agrees that a sale is in your best interests. New Leaf are experienced structured settlement buyers with thousands of transactions behind us.

For those who don’t know, a structured settlement is a special form of annuity, often awarded to claimants as a result of a personal injury suit or some other court case. We pay money for structured settlements that no longer serve the needs of the annuitant. We also offer a fast structured settlement advance guarantee to ensure sellers are not out of pocket while waiting for the funds to be released.

As with annuities, releasing future cash can help you to take advantage of high growth investment opportunities you may have otherwise missed. For example, you might be able to put a down payment on (or buy outright) a bargain investment property or invest in a business which goes on to thrive. In the best case scenario, the returns from these investments could replace your earned income and allow you to retire early.

With a structured settlement, the seller will usually have to attend court for a meeting with a judge who will check that you are not going to be worse off as a result of the deal.

If you know somebody who has a structured settlement in place and are frustrated about having to wait for future payments, make sure they know that they have the right to receive cash for structured settlement payments if that is in their best interests.

Whether you are interested in selling an annuity or a structured settlement, please contact New Leaf in the first instance. Our contact number is 1-800-517-7671

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Pay off your Debts Using Structured Settlement Money

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Are you one of the many Americans who have received a structured settlement following a personal injury, workers’ comp or wrongful death claim?

Are you struggling with debt but unable to access your own cash for structured settlement payments that are due in the future?

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This article looks at the common issue of debt and how to set about turning your finances around. We then look at the pros and cons of selling structured settlement payments to clear debt. Then we finish off by exploring ways to stay debt free in the future.

The American Debt Problem

If you are concerned about debt then the first thing to understand is that you are not alone and that there is help out there for you. Millions of Americans are worried about their personal debt with some sources putting the average household figure at over $7,000.

Some kinds of debt are unavoidable (medical fees, mortgages, student loans, etc.) but private loans and credit cards are big culprits for avoidable debt, together responsible for tens of billions of dollars of public debt. It is easy to get sucked into spending money you don’t have and once you start missing payments on loans or credit cards, the debt problem can start spiralling out of control.

One of the reasons credit cards are so dangerous is the effect of compound interest. The only way to use credit cards sensibly is to pay off the entire balance on time, every month. But how many people do that? If you only pay the minimum amount off each month, interest will be added to the remainder (and often at a high percentage rate too). Missing the minimum payment is even worse as this will almost always attract a higher penalty interest rate and missed payment fee.

What can be done to tackle personal debt? The first step is to accept and understand the scale of the problem. Then there needs to be some kind of workable plan to pay off existing debt. Finally, new habits must be put in place to avoid a repeat of the problem.

Credit counseling services affiliated to the National Foundation for Credit Counseling (NFCC) or Financial Counseling Association of America (FCAA) can provide useful help and support.

Why Using Money for Structured Settlements to Clear Debt is Worth Considering

When you were first awarded your structured settlement, you will have been well aware that the payment schedule was designed to provide security both in the short and long term. You may still regard those future payments as untouchable. However, the initial judgement on the precise scheduling of your payments will have been based on your financial circumstances at the time and on your expected needs going forward. Neither the judge nor your attorney would have predicted any future problems with debt.

In most cases, the quicker you can resolve debt, the more money you will save in the long term. While debt settlement plans, private creditor arrangements, consolidation loans and other strategies may be able to help, the best method is to clear the debt in one go with a single payment.

However, you must always balance this fact with meeting your anticipated future needs before deciding to access your structured settlement cash. For example, you might be expecting to retire early due to an injury. This might have been provided for in your structured settlement with regular monthly payments set aside until a designated future date. If your circumstances haven’t changed, it would probably be unwise to take away that safety net. You could end up just postponing hardship to a later date.

In another hypothetical scenario, you may have money set aside to buy a brand new wheelchair every ten years. If your current wheelchair is five years old and in perfect condition, you might feel happy to forego the next payment and use the money to pay down debt instead.

It all depends on your current and expected future circumstances.

How Structured Settlement Buyers can Help you Become Debt Free

Cashing out guaranteed or life contingent structured settlements is not the same as collapsing other types of investment. That’s because the payment schedules are fixed in law and cannot be changed.

The only way to unlock the funds is to sell the rights to the payments on to someone else. This is where structured settlement buyers (also known as factoring companies) can help. The sale has to be agreed by a judge who will look at all the evidence to satisfy themselves that the sale is in the interests of the seller. Before this stage, the seller will need to provide documents and fill out forms. The process varies depending on circumstances (e.g. the state in which the issuing insurer is based) which is why a long-serving company like New Leaf can provide a better service than less established companies.

New Leaf Structured Settlements are highly experienced in working with insurance companies, annuitants and judges in structured settlement transactions. This can help us to expedite transactions and get money in the sellers’ pockets more quickly.

As structured settlement sales can last months, we also offer a structured settlement advance service. This means that sellers can have funds in their bank account within hours, ready to be used to pay down debt.

We can also guarantee to beat our competitors by offering more money for structured settlements than anyone else. In fact, if we are unable to beat a genuine quotation by at least $1,000 we will pay $200.

Moving Forward: Staying Debt Free

Once you’ve finally paid off your debts with your structured settlement money it is time to make some changes to avoid a similar situation in the future. Debts often come about through bad spending and saving habits so learning how to manage a budget, set aside emergency funds and build up savings is important.

Budgeting is often seen as a dull and/or complicated task but it doesn’t have to be. There are plenty of apps that make budgeting easy but even a simple spreadsheet with a list of incoming and outgoing payments will suffice. The aim is to see where you can adjust expenditure to ensure you are making more money than you spend.

Some people’s journey into debt comes following an unforeseen emergency. For example, their car might pack up or they are forced to pay out for a water leak. Most financial experts recommend building up an emergency fund before you start saving. The amount of money in your emergency pot should probably be a minimum of six month’s worth of salary.

Once your emergency pot is full, you can begin a savings plan, confident that you won’t need to dip into it for any reason.

Done properly, saving is the inverse of debt. Rather than falling foul of interest rates, you can take advantage of what is essentially free money. Low risk saving includes placing money in standard savings accounts and investing in government bonds. Rates of return tend to be low but your original investment is safer. Investing in stocks and shares can lead to higher returns but the risk of losing money is much higher.

If you are interested in a free quote for selling your structured settlement payments, please call New Leaf on 1-800-517-7671.

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Relieve Your Stress By Selling Your Structured Settlement Payments

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Are money worries getting you down? This isn’t surprising as being in debt or simply struggling to live from paycheck to paycheck harms our quality of life. We don’t get to do the things we want to do, we feel guilty if we splash out on something to make us feel better and we worry that things will never improve or even get worse.

The worst situation is, of course, being in debt. Although a level of debt is completely normal, healthy and expected in today’s society (e.g. mortgage debt or a hire purchase deal on a car to get you from A to B), many people misuse debt instruments.

The classic example is the credit card. Credit cards can be incredibly useful for assisting with cash flow and accessing special offers. They can also help you to build your credit rating if you manage them well. Sadly, too many people do not use credit cards well at all.

If you are one of the many Americans who use their credit cards to cover a shortfall in their income and then only pay off the minimum payment each month, your balance will just keep growing due to the compound effect of interest. It’s like allowing a snowball to roll downhill. Even worse, if you miss payments, you will be exposed to late fees and possibly a penalty interest rate – not to mention damage to your credit rating.

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Unable to borrow from a bank, some people resort to high interest loans which can lead to further debt.

If this sounds like your life and you are a beneficiary of a structured settlement or annuity, it could be time to reassess whether the deal that was agreed is still serving your best interests. When your structured settlement was set up, your attorney and the judge will not have been able to factor in all of the life changes that were ahead of you.

One thing is for sure, you living under intense stress because of debt is not what they will have had in mind!

The Damaging Health Effects of Stress

Every day there seems to be a new health-related article blasting the effects of stress on the mind and body. The basics behind the stress reaction come from evolution. We are hard-wired to react to threats by either running away or fighting. However, our brains don’t discriminate between a physical threat (like a tiger or armed robber) and an abstract threat (e.g. becoming bankrupt or losing our home). Our bodies react in the same way by pumping chemicals like cortisone into our bodies, increasing our heart rates, diverting blood away from our stomachs and more.

The result is anxiety, high blood pressure (increasing the risk of stroke or heart attack), sleep disorders, eating problems, indigestion and more.

Financial worries can put a strain on relationships as family members fear for their security. The inability to provide for the family can lead to guilt, shame and a loss of self-esteem. We might start to feel hopeless and depressed.

If life is like this for you but you have a structured settlement that pays you lump sums or regular payments on a fixed schedule, it’s time to question whether you would benefit more from getting your hands on the cash right now.

Now, it’s not possible to change a structured settlement but you can sell the whole package to someone else. Factoring companies (aka structured settlement buyers) like New Leaf Structured Settlements specialize in this process. This is because selling a structured settlement involves liaising with insurance companies and following strict legal processes so you need a company that knows what its doing. It’s not always appropriate to cash in on your future security but sometimes it makes sense to do so and your right to do so is protected by Federal law. Every circumstance is different which is why you should take as much advice as possible before committing to anything.

If you’re now thinking, ‘great, so how do I sell my structured settlement?’ then continue reading as we explain the basic process and let you know how to get started.

What’s Involved in Selling your Structured Settlements

The concept behind selling structured settlements is quite simple. In essence you are trading your future regular payments and/or lump sums for a one-off cash payment. Of course, that payment will be less than what you would have received as the buyer has to make a profit. The deduction is known as the discount rate and the lower the discount rate, the better the deal.

At New Leaf Structured Settlements, we guarantee we will get you more money for your guaranteed or life contingent structured settlements than any of our competitors. And if we can’t provide you with at least $1,000 more we will give you $200 just for getting a quote from us.*

Although the idea of selling structured settlements is simple, the process itself can be complex. Each structured settlement is unique and different states have different laws which need to be followed to the letter (both the state where you live and the state where the annuity issuing insurance company is based).

The experienced team at New Leaf Structured Settlements is able to liaise closely with insurance companies to expedite the process but sellers also need to be prepared to fill out documentation in a timely manner. We can help with all of that.

Once the documentation is completed, there is still the small matter of a court appearance (in some states). This will allow the judge to speak directly to the seller before deciding whether or not to approve the sale.

As you might imagine, this process can take a long time. That’s why New Leaf Structured Settlements offer a structured settlement advance. This is simply an advanced payment which can be made available to sellers within 24 hours. The advance is reclaimed from your final payment once the process has been completed.

From Problems to Possibilities

When you have received your lump sum payment and eased your stress by paying down your debt, it is important to reassess your finances to avoid any repeat in the future. Money for structured settlements is like a ‘get out of jail free’ card. You need to get serious about your financial health.

There is a lot of information online about smart budgeting and it is wise to get together with your family and an independent financial advisor to ensure you never have to suffer the stress of financial difficulty again.

On a positive note, many people find that once they have cleared their debt and improved their financial habits they can start putting money aside for emergencies and investing for the future – both through savings and accessing education or training opportunities.

If you need any further information about obtaining cash for structured settlements, please call New Leaf Structured Settlements on 1-800-517 7671. We promise not to hound you like our more aggressive competitors. We respect that the decision over whether to free up some of your future security is a profound one and will support you in making a decision that is right for you.

*Guarantee available at time of writing. Please call us for latest information on 1-800-517-7671.

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12 Ways to use your Structured Settlement Cash Wisely

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If you have recently received cash for structured settlement payments or are planning on selling your structured settlement payments in the near future, you will need to make some decisions on how to use that money.

Here are 12 tips for spending that money wisely:

Don’t Blow it!

It may seem an obvious point to make but the least wise thing you can do with your structured settlement advance is to waste it all on a luxury purchase or risky venture. This is no idle warning because many people who come into money suddenly, whether through a structured settlement payout, lottery winning, inheritance, employment bonus, redundancy package or some other means, end up losing the money as quickly as they received it.

It can be tempting to start spending immediately but we recommend you run through the rest of these tips before you part with even a cent of your structured settlement check.

Discuss your Options

Chances are, the spending choices you make will have an impact on other people around you, especially your close family. There may be conflicting priorities about where the structured settlement money is best directed so make sure you take enough time to all get together and have a serious conversation about this.

You would also benefit from speaking to an independent financial advisor who will be able to use their knowledge and professional judgment to guide you in the right direction. For example, their experience with different types of investment could save you from making costly mistakes.

Talk About tax

If you don’t pay attention to the tax implications of your spending decisions, you could be in for a very unpleasant shock. Although structured settlement payments are usually exempt from tax, any profit you make from that money (e.g. returns from investing in stocks and shares) is likely to be taxable. Consult with an accountant or a tax specialist to find out the tax implications of any decisions you make. They may be able to suggest a more tax-efficient way to achieve your goals. They will also be able to ensure you are not unwittingly evading taxes, protecting you from IRS penalties.

Pay Down your Debt

Paying off debt is often one of the wisest financial decisions you can make. Servicing debt interest payments are a drain on your finances and excessive debt will also harm your credit rating. However, in some cases spending all of your structured settlement money, even to retire debt, can lead to hardship in the present.

If this is the case with you, consider paying off some of your most high interest debts (e.g. a credit card balance or pay day loan). This will reduce some of your repayments while still leaving you with the money you need in the short-term.

Set up an Emergency Fund

Every household experiences emergencies every now and then. These can be relatively minor (a car breaking down, a water leak in the house, etc.) or quite major (e.g. loss of a business, unemployment, etc.) Often this means either having to borrow money or dipping into savings. An emergency fund is a buffer that avoids both of these options. It is up to you how much your emergency fund should be but it is good practice to have at least six months’ salary set aside.

Separate this money from the rest of your finances so you are not tempted to touch it.

Downsize your car

It is tempting to use structured settlement money to buy a bigger and better car but this can put added pressure on your daily budget due to an increase in gas and maintenance costs. On the other hand, upgrading to a smaller, more fuel efficient car can save you money in the long run. Investing in an electric car can, of course, eliminate gas costs altogether.

If you do need to use gas, schedule in your refills so that you can use the cheapest filling station. Keeping a log of your journeys can help you to keep an eye on your fuel usage. Perhaps walking to the convenience store for a top up shop is an option after all!

Invest in Yourself

One way to use your structured settlement payout to improve your overall financial health is to invest in a means to increase your salary. Whether that means earning promotion or moving to another employer, paying for relevant training or certification will increase your value in the workplace. There are plenty of options you could consider. For example you could attend undergraduate or graduate school full-time, sign up for an apprenticeship scheme, take a part-time evening class, or enroll on a massive open online course (MOOC).

Invest in your Children

Many people use structured settlement cash to pay for their children’s college fees and not just because it is a loving thing to do. Without the burden of student loan debt to pay off, your children are then free to spend their hard earned cash on providing for their future. Not only will that reduce the risk of them needing to rely on your money in the future, they are also more likely to repay the favor by supporting you in your retirement.

Invest in Business

There are two ways of investing in a business: you can either start one of your own, or in a partnership with someone else, or buy shares in one or more businesses. It is important to understand that both of these options entail risk and therefore you could lose all of your structured settlement money.

On the other hand, investing in the right business at the right time can lead to amazing returns. Speak to a financial advisor and your family before deciding if investment is for you.

Increase the Value of your Home

Whether you are planning to sell in the future or pass it on as an inheritance, adding value to your home through renovation or refurbishment is a wise choice. Adding extra rooms by extending or converting a garage or basement will almost always add value while improving the aesthetics of your property or land can increase its appeal and lead to a faster sale. Keep an eye on neighborhood prices though because this will determine the maximum price you can sell for.

Make a Donation

If you believe in karma, making a donation to your favorite charity may lead to reward in the future. And if you don’t think your good deeds will be rewarded, you can still benefit from the uplifting feeling of having given back to society.

Either way, don’t forget that any donations you do make from your structured settlement payout are allowable as expenses for tax purposes.

Celebrate!

Just because it’s foolish to blow all your structured settlement money on parties and shopping, that doesn’t mean you have to hang on to every cent. Everybody deserves some pleasure in life so whether you decide to take a short vacation with your partner or treat your family to a slap up dinner, make sure you make an occasion of your financial bonus.

If you are looking for an experienced company who can guarantee you the most money for structured settlements, talk to New Leaf on 1-800-517-7671.

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Structured Settlements: Most Frequently Asked Questions

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Whether you are considering setting up a structured settlement or thinking about selling an existing one, you’re certain to have some questions.
We have compiled a list of the most frequently asked questions regarding structured settlements.
Please call New Leaf Structured Settlements if the question you have isn’t answered below.

Setting up Structured Settlements: Common Questions & Answers

What are structured settlements and why were they created?

Structured settlements enable a large sum of money (e.g. the settlement due from a successful personal injury or wrongful death claim) to be paid gradually over time. Structured settlements were first promoted as a solution to the difficulties victims were having in managing money while recovering from illness or injury. The Periodic Payment Settlement Act was enacted in 1982.

Are structured settlements likely to be recommended in certain cases?

Structured settlements are often recommended in cases involving temporary or permanent disability, wrongful death and serious injury. They are also commonly used in workers’ compensation cases and whenever the plaintiff is a minor or unable to make decisions for themselves.

Who determines the payment amounts and schedule?

This will be agreed between the attorneys of the plaintiff and defendant, often with the help of structured settlement brokers.

Am I better off going for a structured settlement or a lump sum payment?

Every case is unique and your attorney can help you make that decision. In general, structured settlements are better as they secure your future income and provide a guaranteed return.

Couldn’t I just invest my lump sum in stocks and shares for higher returns?

You could but stocks and shares are riskier than annuities and the proceeds will usually be taxed.

How flexible are structured settlements?

Before they are agreed, structured settlements are very flexible and can be designed around various different payment schedules. After they have been agreed, they are inflexible and the money can only be released early by selling to a factoring company like New Leaf.

I have been told my structured settlement will be invested into an annuity. What is an annuity?

An annuity is a financial tool for enabling periodic payments to be made over time. Life contingent annuities pay out until the annuitant’s death. Guaranteed payment annuities will continue to pay out until the agreed schedule ends.

Will I have to pay tax on my structured settlement payments?

In most cases, no. Section 104 (a) (2) of the U.S. Code says that taxable income excludes: “the amount of any damages (other than punitive damages) received (whether by suit or agreement and whether as lump sums or as periodic payments) on account of personal physical injuries or physical sickness.”

Ask your financial advisor or accountant for a definitive answer.

Can my structured settlement be passed on to my heirs?

This will depend on the type of structured settlement you agree to. A life contingent annuity will stop paying out when you die whereas a guaranteed payments annuity will pay any remaining amounts to your designated beneficiary. You can even choose to add a commutation rider which will convert any remaining payments into a lump sum for your heirs.

Can my heirs sell my structured settlement payments?

Yes, any remaining payments can still be sold.

Selling Structured Settlements: Common Questions & Answers

Isn’t selling a structured settlement the same as taking out a loan?

No. With a loan, the lender lends you a sum of money and you agree a schedule for paying back the money plus interest.
The money you get from selling a structured settlement is yours to keep. The interest (discount rate) is agreed and deducted during the sale.

Can I sell my structured settlement payments before I have started receiving payments?

Yes. It doesn’t matter if you have yet to receive a cent; you can still sell your structured settlement.

Can I sell my structured settlement payments after I have started receiving payments?

Yes. It doesn’t matter how many payments are still due, you can still sell your structured settlement.

How big does my structured settlement have to be for sellers to be interested?

Whatever the size of your structured settlement, there will be structured settlement buyers out there who will be interested in giving you a quote. At New Leaf Structured Settlements, we are happy to buy structured settlements of any size.

Can I sell a structured settlement that has been set up for a minor?

In some cases, yes. You would have to prove that the child is likely to experience significant financial hardship unless you liquidated their structured settlement.

I’ve received a good quote from another seller. Is there any point calling New Leaf?

Absolutely. We guarantee to beat a genuine quotation by at least $1,000. What have you got to lose?

If I call you, will you keep pressurizing me until I agree to sell?

No. While some of our more aggressive competitors will behave in that way, we respect that you need time, space and independent advice before making your decision.

How long does it take to receive funds from a structured settlement sale?

The actual time frame will vary but is usually between 45 and 90 days. Sellers can minimize the wait by ensuring documents are provided and forms filled in promptly and accurately. However, a lot depends on the availability of the approving judge.

To fill the gap, New Leaf offer a cash advance service which can pay funds into your account within 24 hours (and sometimes within just a few hours).

Why does a court need to approve the sale of my structured settlement?

The Federal Periodic Payment Settlement Act of 1982 introduced several consumer protection measures to prevent unethical structured settlement buyers from duping people into selling when it wasn’t in their interests. This included the need for oversight and approval from a judge.

Will the judge approve my structured settlement sale?

This will depend on several factors. The judge will want to be satisfied that the sale will not cause you financial hardship in the future, that you understand the transaction and that the seller is not taking advantage of you.

I’ve had a structured settlement sale refused by a judge in the past. Will the same happen again?

Not necessarily. If you can prove that you need the money, understand the process and will not experience financial hardship as a result of the sale, the judge is likely to allow the sale. A judge can sometimes refuse a deal if the discount rate is deemed too high.

How can I prove to a judge that I need the money from a structured settlement sale?

First, you will need to be honest with yourself and discern wants from needs. For example, you might need a specially adapted car to make traveling more comfortable. On the other hand, wanting a car because you’re bored of your existing one is a ‘want’ and will not convince a judge.

Will I have to pay tax on the proceeds of my structured settlement sale?

In most cases, no. In 2002, the federal government introduced legislation to make the proceeds of structured settlements tax exempt, providing they were being used to ease financial hardship. Speak to an independent financial advisor or tax specialist if you are unsure.

Why should I trust New Leaf to buy my Structured Settlement?

As experienced structured settlement buyers, we can offer a raft of guarantees to our customers. For example, we guarantee we can offer more money and deliver funds more quickly than our competitors. We are also an ethical structured settlement buyer and will never pressurize you into making your decision.

These are some of the most common structured settlements FAQs but we’re sure you have more specific questions of your own. Please don’t hesitate to call New Leaf Structured Settlements on 1-800 517 7671 to speak to one of our friendly team.

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10 REASONS FOR SELLING ANNUITY PAYMENTS

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Annuities and structured settlements are both popular ways to secure a person’s future financial well being. Whereas annuities are like insurance, paid for through premiums, structured settlements are arranged following a successful court case. But what happens if you no longer need the safety net that these financial instruments provide and want to get hold of that locked up money now?

The good news is that structured settlement buyers like New Leaf Structured Settlements can release those funds by offering a discounted lump sum of money for structured settlements or future annuity payments.

People who are selling these future assets don’t usually do it on a whim. They usually have a specific need in mind.

From buying a house to escaping the destructive effects of inflation, here are 10 of the most common reasons for accepting cash for structured settlement payments.

Buying a House

Buying a house is a huge commitment with an equally big price tag. If your annuity or structured settlement is large enough, you may be able to afford to buy a property in its entirety.

If your lump sum isn’t going to be large enough for the property you want, you could use it as a down payment for a mortgage. The average down payment is around 10% of the purchase price but you may be able to get a deal for as low as 5% down payment with some lenders.

According to the National Institute of Realtors, the average purchase price of a house is $188,000 although prices obviously vary massively across the country.

Single Big Purchase

If you don’t have the funds available for a big purchase, your options are limited. Borrowing money attracts interest and if you don’t have a high enough credit score for the best rates – or even to borrow at all – you will struggle.

One of the biggest single purchases you might make with the proceeds from your sold annuity payments is a new car. Alternatively you could make a significant down payment on a hire purchase vehicle which will reduce later payments. Balance buying a new vehicle, which will quickly depreciate, with a second hand car, which may require more frequent maintenance.

Other big purchases might include a computer system, sports equipment, home furnishings or a home movie theater.

Starting a Business

The average cost of starting a business is $30,000 but if you are new to the business world you will probably find external investment hard to come by at first. Selling your annuity payments can be the ideal solution, enabling you to pay for business rates, machinery, professional services (lawyers, accountants, etc.), salaries, initial stock, marketing and all of the other start-up costs and initial overheads.

Investing

Not everyone has the interest, skills or confidence to start their own businesses but they are interested in making money from them. The proceeds from a structured settlement or annuity sale can be used to invest in an existing business or, more generally, in the equities market.

Other popular forms of investment include stocks, bonds, retirement funds and property. Although investing in this way is riskier than waiting for your annuity or structured settlement to pay out, the rate of return can be higher. Another advantage with investing is that you can usually roll over annuity funds into another investment account without losing its tax benefits. Speak to a financial planner before making a decision.

Legal Costs

Legal costs, as we all know, can be steep so if you are involved in an ongoing case you may decide to sell your annuity payments to take away some of the stress. Divorce proceedings are a common reason why people sell annuities, especially when they are a shared asset and need to be liquidized. The money can also be used for child counseling, therapy and other associated costs.

Medical Costs

Did you know that medical costs are the biggest source of bankruptcy in the United States with medical bills often larger than medical insurance payouts will cover? Big bills, such as those following a car accident, can be difficult to afford and even smaller medical bills can rack up quickly with the costs of dental care, minor surgeries and medications. As a result, selling annuity payments is a popular method of clearing medical bills.

Older people in poor health may opt to sell their annuities to fund private care. This is especially likely if they have life contingent structured settlements in place as they will know these can’t be passed down to their children. Funeral and probate costs can also be eased by selling future annuity payments.

Debt Repayment

Private debt, in particular credit card debt is a big problem for many people.

The main problem with debt is the effect of compound interest. As missed payments and interest build up, the outstanding debt snowballs and can get out of control.

A lump sum payment from an annuity or structured settlement can be one of the only ways to settle that debt and enable financial freedom once more. Paying down debt is also a good strategy for improving your credit rating. This can make you eligible for future borrowing at preferred rates.

College Education

College fees have increased considerably over the past decades and around 40 million Americans are sharing the burden of around $1.2 trillion debt. Parents often decide to cash in on future annuity payments in order to support their children through their education.

Beneficiaries of structured settlements following a workers’ compensation or personal injury suit may decide to retrain in an area where their injury does not prevent them from working. In this case, they may choose to sell their future payments to fund their courses.

Special Occasion

Some people decide to cash in their structured settlements or annuities so they can afford to pay for a big wedding or exotic honeymoon. Others may simply opt to splash out on a round-the-world cruise or long-haul holiday.

Escape Inflation

Inflation is the difference between the increase in average salaries and the average increase in the cost of living. The result of positive inflation is that money doesn’t stretch as far.

If your annuity is fixed or performing poorly in relation to inflation, you are effectively losing money. By cashing in on your asset early, you can choose to spend the money now or invest it in higher performing accounts.

So, Should I Sell my Structured Settlement or Annuity?

Everybody’s circumstances are different so there is no simple answer to this question. If you are unsure whether selling part or all of your future payments is in your best interests, it is best to speak to a qualified financial advisor.

The good news is that any sale will have to go through the courts and a judge will only approve it if they are convinced you will not endure future hardship because of it.

If you can’t afford to wait the 45 to 60 days or more for a structured settlement or annuity sale to go through the courts, some buyers offer a structured settlement advance. New Leaf Structured Settlements can have your advance in the bank within 24 hours or sometimes even earlier.

If this is of interest to you, contact us today for a quote.

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WHY WORK WITH NEW LEAF? SELL YOUR STRUCTURED SETTLEMENT PAYMENTS

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Are you frustrated at having money locked away in a structured settlement or annuity? You’re not alone.

No court approves a structured settlement with the object of making the annuitant’s life harder. However, changes in life circumstances can quickly turn the financial life jacket of a structured settlement into a straitjacket, restricting the beneficiary’s access to the money that’s rightfully theirs.

For example, you might have built up unpaid medical bills or credit card debt or have an upcoming surgery you need to pay for.

On a more positive note, you might have decided to start up a business, fund a college course or make a down payment on the house of your dreams.

Borrowing money is expensive and may not even be an option so what can you do?

Structured settlement buyers like New Leaf Structured Settlements specialize in freeing up that money by purchasing your future payments for a discounted rate. There are many reasons why New Leaf is the smart choice when it comes to selling your structured settlement.

Here are some of them:

We Offer the Best Guarantees

We know that when it comes to getting money for structured settlements, you want the maximum cash value possible as quickly as possible. That’s why we’ve included these specific outcomes in our set of industry-leading guarantees, as follows:

  • We guarantee that we will make you a bigger offer than our competitors – beating them by at least $1,000. How much is our guarantee worth? Exactly $200 because that’s what we will pay you if we can’t honor the above. All you would need to do is provide proof of the offer and a disclosure statement.
  • We guarantee to fund you faster than our competitors.
  • We will guarantee a specific funding date – and stick to it.
  • Our ‘no fee’ guarantee means the value on your quote will be the value of the funds you receive.

We Have the Experience

Experience counts for a lot in the structured settlement industry and we at New Leaf Structured Settlements have it in abundance. We employ some of the most established and nationally-recognized structured settlement specialists in the business. We have reviewed, processed and originated thousands of successful sales.

However, we know that selling your structured settlement is one of the most important transactions you will ever make so we will treat your case with the diligence, professionalism and care you deserve. We will explain every step of the process so you will know exactly what is going on at every step.

Every structured settlement is set up differently and our team will bring their expert attention to your service as they evaluate the different options available.

Our experience is the reason behind one of our other key benefits: our streamlined sales process.

We Offer a Hassle-Free Transaction

It should always be borne in mind that a structured settlement sale is a legal transaction. In the same way as you wouldn’t trust a second hand car salesman to close your house sale, you shouldn’t allow an inexperienced firm to handle your structured settlement process.

We are used to working closely with insurers which means we know exactly what they need from us to proceed quickly. Our in-depth knowledge of the legal system means we can avoid legal delays and ensure the court has no obvious reason to deny the sale.

Our streamlined service applies throughout your customer journey, from the moment you request a quote (which we will normally send back within two minutes) to the moment those much-needed funds arrive in your bank account.

You Could Have your Cash Advance in as Little as a few Hours

Sometimes people ask: ‘How soon after I sell my structured settlement will I get the cash?”
As explained earlier, a structured settlement sale is a legal process and this means there will inevitably be a wait between signing the contracts and the funds being released into your account. This can last several months.

So, what do you do if you need that money urgently? Perhaps you need to pay a down payment on a house or buy a car before it’s sold to someone else.

A structured settlement advance is the answer. This is where we send you a lump sum payment from our funds while we wait for the transaction to complete. We will make sure those monies are in your account no later than 24 hours after you request them – sooner where possible.

We are Supremely Flexible

Some structured settlement buyers are only interested in settlements of a certain dollar value and above. Others only want to buy out your future lump sum installments – or your regular payments. Yet others won’t consider any annuities that are due more than 20 years down the line or are life contingent.

To make things easier for you, we are interested in all types of structured settlement. That includes:

  • Life contingent structured settlements
  • Guaranteed structured settlements
  • Structured settlements due within the next few years
  • Structured settlements not due for several decades
  • The lump sum portions of structured settlements
  • The periodic payment portions of structured settlements
  • Small structured settlements
  • Huge structured settlements
  • Structured settlements that have been refused by every other structured settlement buyer you’ve approached!

In short, if you are in need of cash for structured settlement payments, New Leaf Structured Settlements will find a way to help you out.

We Believe in a Zero Pressure Approach

Some structured settlement buyers are very aggressive when it comes to presenting their offer to potential sellers. As premier boutique structured settlement sellers, New Leaf take a professional and ethical approach to our business. We will never try and pressurize you into selling because we don’t presume to know what’s best for you. Only you have a complete picture of your financial circumstances and you should be given the time and respect to come to a decision in your own time.

So, if the fear of constant telephone calls has put you off getting in touch with us before, please don’t worry. We promise not to hassle you.

We also promise not to sell or rent your email address to anyone else if you fill in our contact form.

We Offer a Fast, Free Quote

If what you’ve read so far has convinced you that it’s worth finding out more, we invite you to request a free quote via our smart form. You will need to answer a few simple questions about the type of structured settlement you have, payment schedule, amounts due, etc. and then we will send you a price, usually within two minutes.

Selling a structured settlement is always a big moment in our customers’ lives. Structured settlements were never designed to be a burden but the unpredictability of life and the inflexibility of these types of arrangement often cause them to become just that.

By working with New Leaf Structured Settlements you can be sure you have an expert team on side working to unlock your cash and get the best result for all concerned.

If you need any further information about structured settlements, annuities or the New Leaf process, please call us on 1-800-517 7671

Things to Ask Before Consulting a Settlement Planner

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Settlement planners, also known as estate planners or special needs attorneys, are specialists in the setting up of structured settlements, mainly with the purpose of preserving the eligibility of disabled claimants for certain needs-based disability benefits. They also work on behalf of other vulnerable members of society such as minors and those without the capacity to make sound financial judgements.

Settlement planners are used to working in multi-agency teams which might include financial planners, CPAs, trust and estate attorneys and personal injury attorneys. If you are a personal injury attorney and you think it is in your disabled client’s best interests to set up a structured settlement, you will probably want to bring in a settlement planner. However, it is a good idea to be prepared with answers to the following questions before you make that call:

Do you or your Client Need the Help of a Settlement Planner?

Each case and every structured settlement is different but working alongside a professional settlement planner is always recommended whenever you are involved in setting up guaranteed or life contingent structured settlements for disabled people. However, it is particularly important if the defendant has a settlement planner working with them. Without an equivalent on your team, you and your client will be at a disadvantage as the defendant’s settlement planner will be looking mainly to minimize the exposure of their client. You will need access to the specialist knowledge of a settlement planner to understand fully the implications of what is being proposed and also to challenge any proposals that would negatively impact on your client’s present or future finances.

Structured settlements are complex tools at the best of times but when vulnerable people are involved, the implications of making a wrong decision can be catastrophic – both for the plaintiff and you as a professional lawyer with a reputation to uphold. Unless you have extensive personal experience with settlement planning, it isn’t worth the risk in going it alone as a little knowledge is a dangerous thing.

One of the most complex issues when dealing with structured settlement planning on behalf of disabled people is the link between structured settlement benefits and public disability benefits. Failing to understand which benefits your client is in receipt of (or applying for) could jeapordize their eligibility for those benefits. Once benefits have been stopped, it can take a long time to reinstate them, causing extreme hardship not to mention stress and upset to your client. This is not going to do your reputation as a personal injury attorney much good and it could even land you with a legal malpractice, breach of fiduciary duty or deriliction of duty claim. So if the defendant has hired a settlement planner, you should to!

One of the most complex issues when dealing with structured settlement planning on behalf of disabled people is the link between structured settlement benefits and public disability benefits. Failing to understand which benefits your client is in receipt of (or applying for) could jeapordize their eligibility for those benefits. Once benefits have been stopped, it can take a long time to reinstate them, causing extreme hardship not to mention stress and upset to your client. This is not going to do your reputation as a personal injury attorney much good and it could even land you with a legal malpractice, breach of fiduciary duty or deriliction of duty claim. So if the defendant has hired a settlement planner, you should to!

Which Disability Benefits Does your Client Claim?

Understanding the type of benefits a plaintiff is in receipt of (or is planning to claim for) is of utmost importance. If they are only eligible for entitlement benefits such as SSDI (Social Security Disability), Social Security Retirement or Medicare, you might decide to go it alone. Settlement planning will not have an impact on these benefits.

However, if your client is claiming for means-tested benefits, things can quickly become very complicated.

Once you’ve established that means-tested disability benefits are involved, you should find out exactly which benefits your client is receiving and the amounts. This will help your settlement planner to speed up their work and also ensure you are completely in the loop with the process and able to raise any queries. A good settlement planner will also be able to indicate whether there are any public benefits which the injured party has overlooked and could be eligible for.

The main public means-tested benefits that will impact on your client’s life will be Supplemental Security Income (SSI), Medicaid, SNAP food stamps and Section 8/HUD housing assistance. These are all subject to asset calculations and one of the tasks of a settlement planner is coming up with a schedule that ensures the client gets the money they need when they need it while ensuring they remain able to claim disability benefits.

One of the complexities involved in settlement planning, is working out the interplay between Medicare claims and Medicaid entitlement. Achieving Medicare Secondary Payer (MSP) compliance in personal injury lawsuits is even more complicated than in Workers’ Comp cases and even States paying Medicaid can now pursue full reimbursement for cases where other policies should have paid out.

It is also worth making sure your client knows how selling their settlement to structured settlement buyers in the future may also impact eligibility for means-tested disability benefits as structured settlement advances count as resources for asset calculation.

What is the Total Value of your Client’s Assets?

An experienced settlement planner will have several different tools in their financial toolbox for protecting a claimant’s assets from affecting their eligibility for means-tested benefits. The particular ones they are likely to suggest will depend in part on the value of the assets being protected.

For example, an Achieving a Better Life Experience (ABLE) account is a tax-advantaged savings account designed specifically for disabled people. Funds in that account are not counted when calculating assets for SSI, Medicaid or other means-tested benefits. However, the 2019 upper limit for ABLE contributions is $15,000 so assets above that value can’t be protected in this way.

Depending on circumstances, assets of between $15,000 and $250,000 could be put into a Special or Supplemental Needs Trust (SNT) or, for over 65s, a pooled trust. In some circumstances a spend down will be recommended. This is where all the money is spent in the month received but requires evidence to be presented to Social Security within 12 months. A successful spend down will preserve eligibility but may, depending on the jurisdiction, still impact on the value of benefits received. Depending on the type of disability, gifting may be permitted without affecting eligibility for needs-based benefits.

For assets of $250,000 and upwards, an SNT with Medicare Set Aside (MSA) may be the best course of action to avoid problems with MSP compliance. Settlement planners not only help disabled people to set up these special accounts, they can also provide a degree of administrative support and legal advice for ensuring your client meets their fiduciary duties. Ultimately, there should be a smooth transition from the conclusion of the legal case to a long-term financial planning arrangement with the settlement planner in the middle of the process.

Before contacting a settlement planner, liaise with your client to get a full picture of their existing assets. This will help you to design a structured settlement schedule that protects your client’s eligibility while providing a mixture of regular and lump sum payments that maintains their quality of life and provides for their future needs.

Summary

Getting the best outcome for your disabled client requires a multi-agency approach. If you are representing a disabled client in a personal injury case and working on setting up a structured settlement, find out what benefits they are in receipt of, gather together full details of their assets and then find a reputable settlement planner to help beat out the best deal for your client and, most importantly, safeguard their critical public disability benefits.

Disability Benefits Blog

Structured Settlements: The Effects On Disability Benefits

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There are many benefits of selling structured settlement payments but if you are also claiming one or more disability benefits, you should get advice about whether a lump sum will affect your entitlement to them.
The information below is intended to give you some guidance on the likely impact of a lump sum on various public disability benefits but the only way to find out for sure is to speak to your Social Security office or a trusted lawyer or credit counselor.

SSDI, SSI and Settlement Money
Many of our customers whose structured settlement was awarded in response to a successful workers’ comp, personal injury or medical negligence suit, are also in receipt of a public disability benefit like SSDI or SSI. Naturally, they wonder if selling their structured settlement and receiving a lump sum will affect their eligibility for these benefits.

The first place to start is by pointing out some important differences between these two types of support.
Public disability benefits are of two types: Social Security Disability Benefit (SSDI) – also known as Disability Insurance Benefits (DIB) – and Supplementary Security Income (SSI).
If you are already in receipt of SSDI, your benefits won’t be affected by receiving your lump sum. This is because SSDI is an entitlement benefit based on previous payments made under the Federal Insurance Contributions Act (FICA). Your employer will have withheld around 6% from your pay packet to fund SSDI. Or, if you were self-employed, you will have paid into the Social Security fund via your tax return. Either way, the fact that you are already receiving SSDI means that you have fulfilled the eligibility criteria. This situation will not change when you receive a lump sum from selling your structured settlement.
SSI on the other hand is a means-tested benefit for disabled, blind, aged or low-income people. This benefit is likely to be affected by any change in your financial situation. SSI pays out a maximum of $2,000 per month (or $3,000 if you’re married). Since one component of SSI calculations is an asset test, the increase in your assets from a lump sum payment will almost always reduce or end your entitlement to SSI for a while. You must report your change in circumstances to Social Security so they can make the necessary calculations.

It should be pointed out that even if you don’t sell your structured settlement, the periodic payments you receive will affect your SSI entitlement as it is counted as income.

How are Medicare and Medicaid Affected?
Disability often comes with considerable medical expenses such as doctor’s visits, prescriptions, surgeries, therapies and transport to and from appointments. Again, it’s no surprise that many of our customers wonder whether their entitlement to Medicare or Medicaid would be affected if they sold their structured settlement for a lump sum payment.

The situation is almost exactly the same as with SSDI and SSI. Medicare is a health insurance that is available for disabled people who are eligible for SSDI (and have been receiving benefits for 24 months). As such, eligibility is based purely on prior contributions made under FICA. Again, if you are receiving Medicare now, you must have already been deemed eligible and your lump sum will have no effect on Medicare entitlement. However, your income will be used to determine your Part B and D premiums for the tax year in question. If your lump sum raises your income above the current threshold, you will be required to pay the higher rate Part B and Part D premiums. This only affects the tax year in which you receive the funds so later years will revert back to normal.

Medicaid is also a health insurance available to disabled people (and also the blind, elderly, children and people on low income). Like SSI, Medicaid is a means-tested benefit and your eligibility might be affected by receiving a lump sum from a structured settlement sale. If you lose Medicaid, you could find yourself needing to pay a lot of money for medical care, including expensive prescription medications, so you need to speak to your Social Security office or an attorney for some specific advice.

SNAP, which provides food assistance, and HUD, which provides housing benefit, are also means-tested and will be affected by a lump sum payment.

It should be added that gifting your money to someone else or even donating it to a charity does not protect your entitlement to needs-based benefits. The money is still regarded as a resource belonging to you and could mean you are denied benefits for a time or asked to pay back benefits already received.

If you do decide to go ahead with selling your structured settlement, make sure you contact Social Security within 10 days to report your change of circumstances.

Protecting your SSI and Medicaid Entitlements
There are a number of ways to protect eligibility for SSI, Medicaid and other means-tested benefits.

One way is by spending the lump sum in one go (or enough of it to bring you down to your SSI resource limit). Your Social Security office will be able to tell you exactly what that dollar amount is. This strategy is known as SSI lump sum spend down. Before you jump at this option, you should be aware that, although you will remain eligible for SSI, you will likely still need to repay some or all of your SSI for the month you receive the lump sum on (and it will also be counted as an asset for the following month). In some states, the lump sum only counts as income the month after you receive it so if you spend it all in the first month, you may not lose any benefit.

When opting for a spend down, Social Security will suspend your benefit payments until you can provide proof that you have spent the money. Therefore, you should make sure you keep all of your receipts as evidence or at least ensure your spending is accurately reflected in your bank statement. You will need to provide the evidence to Social Security within 12 months. Providing they are satisifed you have spent the money, they will reinstate your SSI benefit. Otherwise you will have to reapply.

Placing your funds in a special needs trust (SNT) is another way of protecting your eligibility for public benefits as they will then not be counted as an asset. However, there are restrictions on what you can use SNT funds for. Common SNT-funded expenditures include transportation, travel, legal services, nursing care, therapies and educational opportunities. If you think an SNT might be the way forward in your cirumstances you should get appropriate advice. A probate or elder lawyer will be able to help you with that.

Sources of Further Support
For most issues regarding your eligibility for Social Security benefits, your first point of call should be your Social Security office.

For further legal advice, you can contact your local legal office or a volunteer attorney program. The attorney who represented you in your original case should also be able to provide you with information about your specific situation.

Other sources of support include non-profit credit counselors (try the Financial Consulting Association of America and the National Foundation for Credit Counseling).