Structured settlements expert John Darer reviews the latest structured settlements and settlement planning information and news, and provides expert opinion and highly regarded commentary. that is spicy, Informative, irreverent and effective for over 20 years.
The STRUCTURED SETTLEMENTS 4REAL® Blog is a highly regarded source for structured settlement news, information, and commentary, led by structured settlement and settlement planning subect mater expert John Darer CLU ChFC MSSC CeFT RSP CLTC. With two decades of operation, the blog and 4structures.com are recognized as comprehensive resources, offering detailed guides and specialized insights. Established in 2005, the blog caters to a broad audience, including legal professionals, injured individuals, families, and various stakeholders, providing reviews and opinions on settlement planning. John Darer, President of 4structures.com LLC, is a seasoned structured settlement expert with over 40 years of financial services experience and 31 years specializing in structured settlements. Based in Stamford, CT, he is a Certified Financial Transitionist and Registered Settlement Planner, holding insurance licenses in 45 states and the District of Columbia. John Darer is dedicated to transparency and advocacy, he emphasizes the importance of engaging trained and licensed professionals for settlement planning, offering valuable insights through his investigative journalism and professional commentary.
Possible Financial Disaster Looms for Uninformed Claimants who Accept Buyouts of Employer Paid LTDs
Some are not receiving an adequate explanation of the ramifications of claimants already determined to be permanently disabled
There is virtually no circumstance if you are totally disabled, where selling your employer paid long term disability claim payments makes financial sense.
Consider the following:
Payments to the disabled from 100% Employer paid LTD are 100% taxable*.
A lump sum buyout of 100% employer paid LTD is 100% taxable and taxable in the tax year of payment of the lump sum.
When continuing to receive 100% employer paid LTD claim payments as scheduled, applicable tax occurs in the year payments are made.
The lump sum buyout could be less than 50% of the total payout.
The lump sum buyout could negatively impact areas of means tested public assistance.
There is virtually no circumstance if you are totally disabled, where selling your employer paid long term disability claim payments makes financial sense.
What is the IRC 104(a)(3) tax exclusion for Disability
The IRC 104(a)(3) Tax Exemption for Disability Payments only applies to “amounts received through accident or health insurance (or through an arrangement having the effect of accident or health insurance) for personal injuries or sickness (other than amountsreceived by an employee, to the extent such amounts (A) are attributable to contributions by the employer which were not includible in the gross income of the employee, or (B) are paid by the employer)”.
