Short term structured settlements are becoming increasingly attractive due to rising short term rates. Consider these figures:
April 11, 2003 compared to March 31, 2006
1 Year T Bill 1.25% v 4.82%
5 Year T Bond 2.92% v 4.72%
Source: Federal Reserve H15 data
Certain transactions which might have been less attractive a couple of years ago may work better for you, your law firm, or your clients now. Where a few years ago you might not have considered structuring your attorney fees, or your firm’s fees, over 5 years it might make sense now given that the yield curve is flat and short term rates virtually equal long term rates. Solo practioner lawyers and firms alike might like to smooth out cash flow and gain some tax benefits from even a short term deferral of fees.
The same applies to structured installment sales of real estate property and businesses. The seller can combine the now more competitive short term with long term cash flows to suit his/her needs with added security of the Allstate Life Insurance Company Agreement to Pay.
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