Whose money is it anyway?

When it comes to your structured settlement, you would assume that you have the power to make your own decisions on how you manage it. After all, you made the choice to have your settlement satisfied by a payment schedule in the first place.

Currently, if you were ever to be in a serious financial bind, you would have the choice to sell all or a portion of your settlement payments to any of a half a dozen major financial companies nationwide. The cost of doing so can be substantial, however, if you have no other options and your situation is dire, you have that right.

All of that may change if the NSSTA (National Structured Settlement Trade Association) accomplishes their goal. They are proposing legislation known as H.R. 4314, which is currently being considered by the House Ways & Means Committee. It’s purpose is to stop all sales of structure settlement payments altogether by imposing a 50% excise tax on the sale of structured settlement payments. What this means is the choice you have now, will no longer be an option.

The insurance companies that support the NSSTA make an incredible amount of money on your structured settlement. When you agreed on a settlement amount for your claim, you were most likely given different options: lump sum payment of a lesser dollar amount or structured payments over a period of time with a greater dollar amount. Often the payments over time pay out more than the lump sum option. This is because the insurance company invests a portion of your total settlement (lump sum) in an investment account called an annuity.

This lump sum will gain interest and over the term of the structured agreement, pay the full amount of the settlement with the interest accrued on the original funds invested by the insurance company.

If H.R. 4314 passes, you will not have the option to sell all or a portion of your payments in a time of need without paying a 50% tax on that money, regardless of the circumstances!

There are things that you can do to protect the right you have to manage your own money. You can find out more information on these topics by contacting your Congressman to voice your opinion at www.congress.org. Speak with a financial advisor or an attorney and do your research online. Protect your rights!