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.
This post is a part of my mission as Structured Settlement Watchdog, to see that consumers have a clear path to accurate information about structured settlements. There is just no excuse for agents, surrogates or promoters of the structured settlement factoring industry to particpate in flooding the market place with content produced from a level of ignorance of the subject matter.
“High Times” at Marketwatch Guides in Dubious Description of Structured Settlements
MarketWatch Guides self describes “helps you make life’s most important decisions through ‘in-depth research’ and expert advice”.
MarketWatch Guides’ Laurie Sepulveda claims, in an excerpt published September 18, 2024, that “Structured settlements are designed to spaceouta large settlement over time to provide victims of injury or abuse help with medical bills or other financial needs. Often, structured settlements are provided through structured-settlement annuities issued by life insurance companies”
“Equi-spaced payments?”
What is the Definition of “Spaced Out”?
“Spaced out is a slang term that means not completely conscious of what is happening. It is often used to describe someone who is distracted, preoccupied, or unfocused from the present moment or the task at hand. It can also be sued to describe someone who is confused, disorientated , stupified, from or as from drug us. The term can also be a warning sign of a serious health problem”.
Annuity.org generates leads for CBC Settlement Funding of Conshohocken PA (another review website states that Annuity.org “primarily acts as a method of funneling them (leads) to CBC Settlement Funding”). I’m not aware of a company called “Stoned Street Capital”. Stretching the research frontier a bit, one can confidently observe that neither Geroge Jetson, nor Spacely’s Sprockets (George Jetson’s employer), nor his wife Jane, nor his children Judy and Elroy, nor the Jetson’s dog Astro, had anything to do with structured settlements. The Jetsons, was a cartoon produced by Hanna-Barbera productions that aired in prime time from September 23, 1962, to March 17, 1963, on ABC (reruns later airing in syndication, in the years preceding structured settlements. While new episodes were produced from 1985 to 1987 a period following the Periodic Payment Settlement Act of 1982, it would be a stretch to support any assertion connecting structured settlements to the “final frontier”.
Marketwatch Guides Blows Definition of Parties toa Structured Settlement
Continuing down “Sepulveda Boulevard”…
1. “Victim (plaintiff or claimant):This is the person who has been injured in some way, such as physical injury on the job. In wrongful death suits, the plaintiff is usually the deceased person’s survivors. The plaintiff is the payee, or the recipient of the settlement”
Comments:
In more than 3 decades I have not seen the term “victim” as a party to a settlement agreement establishing a future periodic payment obligation (sometimes referred to as a “structured settlement agreement”), or a qualified assignment agreement. That doesn’t mean that that someone who was injured or killed in an auto crash is not (or was not) a victim. The proper term in Plaintiff, if the matter is in suit and Claimant if it not in suit. the plaintiff (who is filing the case) is usually a close family member of the deceased person, or the administrator of the deceased person’s estate
Finally, the Plaintiff is not always the payee or recipient of the settlement. Some examples include where the Payee or recipient is a trust, such as a Special Needs Trust, Supplemental Needs Trust, or other fiduciary solutions such as Settlement Preservation Trust, Settlement Management Trust.
2. “Defendant:The defendant is the person or company accused of causing harm to the plaintiff”Comments: According to Black’s Law Dictionary, 2nd Edition. “A Defendant is the person defending or denying: the party against whom relief or recovery is sought in an action or suit”. Hence the first two syllables “de-fend”. For more, please refer to one of my most read blogs
3. “Insurance company:An insurance company, through one of its brokers or consultants, works with the plaintiff and coordinates the specifics of the structured settlement. The money the defendant pays in damages goes to the insurance company to pay for the annuity. The cost of an annuity can range from 9% to 18% of your settlement”.
Comments:
Sepulveda’s work, and the review by Jared Macarin demonstrates a lack of understanding of how insurance coverages work. As with all settlements, a structured settlement is the result of a compromise. A structured settlement can be initiated by any side, but there must be a compromise and sources of the funding of a structured settlement could come from a Defendant, multiple Defendants, perhaps a qualified settlement fund, or multiple insurers.
Sepulveda’s 9%-18% “cost of annuity”is ample evidence of her and Jared Macarin’s inability to discern between the discount rate on a structured settlement factoring transaction and the cost of a structured settlement annuity.
The National Association of Settlement Purchasers (NASP) states in its FAQ section in response to the question “Will I have to pay a high discount rate to get money now for future payments?
Generally, says NASP. “transfers are completed at a discount rate between 9 and 18%. Your exact rate depends on a number of factors, such as where you live, the length of your structured settlement, and the amount you want to transfer, as well as other factors. One should contact more than one funding company”.
Another secondary market site “Cash in Your Annuity”, states “Most purchasing companies deduct anywhere from 9% to 18% of the future value of the settlement (and it could be even higher). It’s supposed to cover the buyer’s risk in waiting for those future payments. It also covers the cost of inflation, which reduces the value of those future payments”.
Finally, at the time of the publication of this blog and most devastating to Sepulveda’s, Macarin’s and Marketwatch Guides’s credibility is that her cited source cites the NASP range of discount rates not the cost of the settlement.
4. “Assignment company or assignee:Assignment companies are an intermediary between the plaintiff and the defendant. Not every settlement uses an assignment company”
Comments:
A plaintiff is NOT a party to a two party assignment agreement. A two-party QA is between a Defendant, or Defendant’s insurer and the qualified assignment company. There are two other types of qualified assignment that require the Plaintiff’s signature. See What is a Qualified Assignment? (4structures.com)
Sepulveda’s assertions about Cons are not well-informed and misleading
1. “Lower payout: You’ll get much less money before interest with a structured settlement annuity than a lump-sum payout. Insurance companies typically charge 9% to 18% of a settlement for an annuity, plus you’ll miss out on the investment gains your settlement could be earning if you invested it”.
Comments: As I’ve already pointed out above as credentialed structured settlement expert, Sepulveda and Maccarin are not subject matter experts and their negligent lack of research misrepresents the cost of a structured settlement annuity. Not only have they blown the 9-18%, they further don’t qualify that investments are not guaranteed or take into account the tax-free status of structured settlement payments that represent damages under IRC 104(a)(1), IRC 104)a)(2), or IRC 139F.
2. “Inflexibility: Once your structured settlement is set up, you’re not able to change it or your payout amounts. You are stuck with the monthly payments you set up for the entirety of your annuity. Unless you opt to sell your structured settlement, which is a difficult process governed by your state’s Structured Settlement Protection Act, you won’t be able to access your entire settlement at once”.
Comments: Sepulveda continues to dig an even deeper hole by falsely implying that anyone selling the rights to their structured settlement payments will be accessing their entire settlement. The most that anyone can get by selling their structured settlement payments to CBC Settlement Funding, or anyone else, is pennies on the dollar. Just pennies on the dollar. One more time for good measure, pennies on the dollar.
3. “Fraud: While structured settle will be able to access their entirement companies are regulated by state insurance commissions, there have been cases when plaintiffs were defrauded of their settlements. One highly publicized case involved former South Carolina attorney Alex Murdaugh, who defrauded several clients of millions of dollars when he set up a fake account mimicking a legitimate structured settlement consulting company and funneled clients’ payments there. Structured settlement fraud is rare but is something to be aware of”.
Comments: Sepulveda’s comments and implications are misplaced. Alex Murdaugh was not a licensed insurance agent. Alex Murdaugh was a South Carolina lawyer and Murdaugh is a convicted felon. Actually fraud has been common in the structured settlement secondary market due to the unfortunate lack of prescient regulation of sales practices by state legislatures. Such legislation is often stimulated by blistering news stories exposing shocking occurrences (e.g. Maryland, Minneosta, South Carolina).
