the attraction to structured settlements 2017
TRANSCRIPT
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STRUCTURED SETTLEMENTS IN 2017
ARE STRUCTURED SETTLEMENTS STILL RELEVANT?
By John Darer® CLU ChFC MSSC RSP CLTC Sudden Money® Advisor
4structures.com® LLC
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A Few Things Structures Have Outlived
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A Structured Settlement Is…
• A core tool in the settlement tool chest • Like a ‘job’ that you can never be fired
from. [ without taxes on most damages in PI/WD cases, also WC]
• A way to reduce cost of an MSA by 20-30% • A way to defer taxes for taxable damages
or attorney fees payable to individual lawyers or law firms
And that’s for starters! ©4structures.com®LLC 2017
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Where Structured Settlements Fit In the Settlement Tool Chest
STRUUCTURED SETTLEMENTS
WEALTH MANAGEMENT
TRUST ADVISORY
• Structured Settlements • Settlement Planning • Sudden Money ®Transition Planning • New York CPLR 50B Structured
Judgment Expertise Analysis/ Projections
• Mediation Support • Structured Legal Fees • Attorney Fee Deferred Comp • Structured MSA • Settlement Trusts • Funding Agreements for B2B disputes,
environmental, commercial litigation • Structured Installment Sales • Life Insurance • Life Insurance Conversions for LTC • Life/Viatical Settlements • Law Firm Buy /Sell Ins, • Disability Buyout Ins. • Long Term Care Ins. • LTC Annuity • LTC Life Insurance • Medigap Insurance • Medicaid Compliant Annuity • Longevity Insurance • Indexed Annuities , Indexed Linked
Structured Settlement Annuity • Deferred Income Annuities, SPIAs
TRANSITION PLANNING
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Why People Allocate to Structured Settlements
• Address Longevity Risk • Risk Tolerance • Backed By Regulated Insurance Product • Tax Benefits • Interest Rates
©4structures.com®, LLC 2017
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Structures Address Longevity Risk
HOW LONG? HOW FAR? ©4structures.com LLC 2017
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Stable Income For Life, or As Long as You Like
©4structures.com®, LLC 2017
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Longevity Insurance Backed by Life Insurance Companies With Lots of Longevity
• New York Life Insurance Company (C19th) • MetLife (C19th) • Pacific Life Insurance Company (C19th) • Prudential Ins. Company of America (C19th) • US Life Ins Co. in City of NY (C19th) • Liberty Life Assurance of Boston (105 yrs) • American General Life Ins. Co. (102 yrs) • United of Omaha (80+ years) • Berkshire Hathaway/Natl Indemnity (75+ years)
©4structures.com®LLC 2017
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Tolerance For Ups and Downs
FUN NOT SO FUN
©4structures.com LLC 2017
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Fine Margins in Risk Tolerance
Faced with these margins, many people find structured settlements attractive
4structures.com® LLC 2017
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Are Annuities a Passing Fad?
Annuities actually go back 2,000 years, underscoring the immutable fact that
annuities have outlived centuries of passing fads
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Condensed Hx of Annuities
• Origins in Roman Empire (27BC-476AD), from Latin “ Annua”
• Middle Ages- Tontine policies, the ultimate ‘Dead Pool’. Popular with wealthy investors.
• 1759 introduced in America as retirement pool for church pastors
• Ben Franklin left annuity to City of Boston in his will that paid out until the 1990s!
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Condensed Hx of Annuities • 1929 Stock Market Crash Safe Havens Sought • 1952 First Variable Annuities • 1975 Structured Settlement Early days in USA • 1982 Periodic Payment Settlement Act • 1985 New York CPLR Article 50A • 1986 New York CPLR Article 50B • 1995 Lump Sum Commutation Rider at Death PLR • 1997 Non qualified assignment facility established by Liberty
Mutual • 1999 Variable Structured Settlement PLR • 1995 Structured Medicare Set Aside • 2008 Non Qualified Assignment PLR (Taxable Damages) • 2014 Index Linked Structured Settlement
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Interest Rates
• Observed to be a secondary consideration for most
• Interest rates have been improving • Structured settlements are part of an
allocation in PI/WD cases • Huge tax leverage on taxable damage
cases
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Are Structured Settlements Still Relevant?
OF COURSE THEY ARE!