Choosing a Buyer of Structured Settlement Payments

Are the biggest names or buyer of structured settlement payments the best? It certainly could be the case, depending on your circumstances. Or, are the other big or mid-size brokers better than the ones we all know and hear of?
Let's deal with facts!
Fact 1: The biggest companies have the bigger overhead
Fact 2: The bigger companies have a bigger staff (could be good, could be bad)
Fact 3. It's fact, you wouldn't want a buyer of payments who isn't smart enough to keep overhead down and money in your pocket.
Now do the accounting!
1. The advertisements and budget is coming out of the seller of structured settlement payments pocket, yours!
2. Does it add up?
Choosing a buyer of structured settlement payment company is indeed a personal decision. Use your own intuition. If it's the bigger company for you then great! If it's the other major leaders or buyer of payments companies that interest you, then great. The main thing, your biggest priority, should be getting the best offer for your structured payments or annuities.
If you are in solid need of funding, and have been considering selling off your monthly payments, do your research. The money is yours, so remember, you deserve to get the largest quote, not settling for less.
Make sure you feel comfortable that you are not being pressured or sold too quickly. Make sure that you will choose the best buyer of structured settlement payments, by checking the reputation of the companies you are getting quotes from.
Once you get your quotes, talk to each of the buyers. Use your own intuition to select the best buyer. Add up all the statistics from your own personal research, the facts, and accounting so that in the end you will be sure you are making sure you are getting the most amount money instead of less.
It just makes sense to add it all up. This could be the one and only time in your life that you can get a large cash lump sum structured settlement. You could be in financial debt up to your ears, and need a way out. Like everyone we have bills to pay and need to be smart with our money.
Or, you may want your money now instead of later, for investment or a new business idea. Choosing the right buyer of structured settlements payments is a very important decision, it's also a very personal one.

Structured Sale Annuity Tax Minimization Strategies

Assuming asset appreciation, capital gains tax will be due when selling a property, business, or business practice in the year of the sale. In most cases, the taxable gains will amount to a substantial sum of money owed by the seller in a short period of time.
For those who are selling a significantly appreciated asset (business interest or property), the federal tax liability can be very burdensome. A structured sale annuity helps to spread the capital gains over several years so as to alleviate a taxable windfall while also providing reliable payments and income to the seller.
How Does a Structured Sale Annuity Work?
The seller and the buyer agree upon a purchase price for the asset. As oppose to the buyer (or bank) paying this amount lump sum to the seller, the funds are pledged to an assignment company. This initial act avoids constructive receipt for the seller and satisfies current I.R.S. rules and regulations.
The assignment company then purchases an annuity with the proceeds from the sale. The annuity is structured in a agreed upon matter to make future payments to the seller. The seller has several options when structuring the annuity and can tailor the payment stream to his needs.
The buyer is released from any future monetary obligation as he has made full payment for the asset to the assignment company. In this way, the seller will not have to rely on the ability of the buyer to make future installment payments.
In order to qualify as an installment sale, the buyer must take at least one payment in the first year. Thus, the payment stream cannot be deferred for longer than 12 months. All funds do not need to be assigned to the annuity however. In some cases, a portion of the sale is taken lump sum and another portion is structured over time.
There are three parts to a structured sale annuity:
1. The non-taxable recovery of the asset (cost basis)
2. The gain or profit from the sale (appreciation)
3. Earned interest from the annuity account
The future annuity payments will consist of an equal portion of each part. The seller will receive a portion of the cost basis, asset appreciation, and interest each year (or month) for the duration of his structured agreement. Those who are looking to establish periodic income payments during retirement can benefit from this arrangement after selling a business, property, or practice.
Why Use An Annuity Account?
Annuities are valuable based on their guarantees and safety. In times of market turmoil, a periodic annuity payment from a highly rated, well capitalized insurance company will provide the peace of mind, safety and regular income needed by most investors.
There are very few companies underwriting structured sale annuity accounts, but those that do are some of the largest and safest in the world. The investment interest gains provided by these accounts will vary depending on market conditions, but they will always have a fair minimum guarantee.
The periodic annuity payments are guaranteed. Should the seller pass away prematurely, then the payments will continue to a named beneficiary as established by the annuity contract.
Tax Advantages of a Structured Sale
A structured sale annuity provides the advantage of simply spreading out capital gains over several years. As oppose to writing a large check to the government over one or two years, those gains will be held in the annuity and earn substantial interest over time. That interest is then payable to the seller each year.
Should the seller have future capital losses, then they could be written off against the portion of capital gains that are withdrawn from the annuity each year. Future non-qualified stock trades or property sales for losses could count against the capital gains distributions from the structured annuity.
In summary, an installment sale will not be appropriate for every situation, but for those with significant asset appreciation who are looking to spread out their capital gains while also providing a guaranteed stream of income will find that a structured annuity sale can be a very valuable investment plan.

A.M. Hyers has been working in the insurance and investment industry for over fourteen years. He owns and operates Hyers and Associates, Inc. an independent insurance and annuity agency doing business across the U.S.
His agency specializes in retirement planning, wealth transfer, and tax minimization strategies. They work extensively with structured annuity and life insurance policies for the purpose of transferring and maintaining wealth.