Tips on taking structured settlement

For most people when they buy a house it is considered their life’s largest deal. In some cases of structured settlements the compensation and financial considerations for a persons life duration and the total present value of the settlement can reach few millions of dollars.

Therefore it is strongly advised to use professional services like annuity consultant and a lawyer specialized in this field in order for you to avoid painful costly mistakes.Here are some tips:- Think twice before you make a decision.

Do you really need that money or you want to feel rich, secure, powerful etc’-Take only part of the money not all of it, in case of an injury claim the Court needs to approve your request, the judge will want to know what do you need the money for.-Some Funds will try to convince you that due to Inflation and rising cost of living your annuity payments have less and less buying power over time.

Remember that if the Structured settlement was done properly it has a cost-of-living adjustment (COLA) feature build into it in order to offset the effects of inflation over time. So the funds claim on this issue is only partially true as the cost of living index is an artificial and biased measure of the actual inflation over time.

Still even 70% protection is reasonable.-When you get a large sum of money take into account that each bank is F.D.I.C. insured for up to $ 100,000 only! That means that if your sum of money is bigger than that you will need to open additional Account/s in a different bank/s in order to be covered.In addition take into account that as long as you deposit your money in C.D’s (e.g. Certificate of Deposit) you are covered, but if you invest your money In fixed income, stocks, bonds, and mutual funds.

These securities are NOT F.D.I.C. insured!- In case you transform Lottery winnings payments or a large sum of money from structured settlement, keep it as discrete as you can, It is not recommended to go and buy a Rolls-Roys or any other flashy car, that will bring the criminals and the charity people to chase you. That might even cause your children start to ask for money.

Try to keep it a secret.-It is a good Idea to get more than one or two offers from various private funds before making a decision, remember you are a very lucrative customer, the funds should fight over you! Don’t be timid to negotiate and manipulate them to maximize your money.

Tax Deferred Exchanges of Investment and Business Real Estate

The Primary Residence taxation, the Residential Substitution Rollover, Sec. 1034 exclusion is gone. Former capital losings still apply, if the property is held as investing property and sold at a loss and that loss can be carried over for up to 7 years. For those over age 55 the primary abode or residential sale exclusion of taxation is gone. Tax postponed exchanges stay a feasible manner of deferring taxation on investing existent estate.

It is required to analyse and pre program prior to transaction. That analysis must be done by an updated tax deferred exchange professional person such as as those we have got on retainer. Not lone make you need a tax attorney, but a existent estate attorney, and an expert attorney workings with them - that is a specializer in only tax consequences; especially those of tax deferred existent estate transactions. There must be proper word forms and written written documents before the transaction is done. This necessitates planning and a reappraisal of restrictions as well as a formal and professional review of premises and decisions.

Most Realtors, Attorneys and CPAs make not have got sufficient expertness to steer you in a legitimate and defendable tax deferred exchange. The cardinal here is defensible, as the Internal Revenue Service will usually scrutinize the tax deferred transaction and if it's done correctly so that it is easily defendable you will canvas right through the audited account for small or no money. Your personal tax profile and that of your other business and household personal identities must be factored in the decisions. It may be necessary to legally refigure, adjust, and compartmentalize your purchase or sale - and written document that appropriately, BEFORE you get to set any portion of the transaction in writing. Planning is legally done BEFORE and if it is done after the transaction you can be apt for fraud. The Internal Revenue Service makes not take kindly to fraud especially regarding existent estate.

For case you must cognize your consecutive line depreciation factor; for investing property that is currently 39 years. For instance: Any depreciation taken during the ownership of the property will be picked up in a recapture tax upon the sale of the property.

Federal and State taxations must be combined properly, according to numerous factors that must be researched by your squad of advisors. Since the sum taxation on the addition is approximately 35% of the addition plus the recapture tax - your fees to people can be well deserving it to you if they better your tax situation. The tax deferred technique can postpone till later or eliminate your tax payment and consequence. Of course of study the lone existent and usual manner to eliminate the tax is to die. There are ways to postpone the tax however until that death. Tax postponed strategies are sometimes called option strategies or option tax postponement strategies.

Note: if you are speaking with anyone and they talk of TAX FREE EXCHANGE or TAX FREE SALE of your property, they are not well informed and thus you should be wary of any other advice they give you. There is, effectively, no such as thing as a tax free sale or tax free exchange of existent estate.

Exchanging is an effectual tax planning tool. Large potentiality tax liability can therefore be deferred. And, there are savvy investors who have got got deferred taxation on billions of dollars of places for decennaries and thus given themselves many billions of dollars of further investing money with which to leverage their wealth.
Like sort exchange can now be defined as: any sort of existent estate in exchange for any other sort of existent estate.

We hear of qualifying property or places - yes there can be more than than two places involved, in some cases there can be respective and you don't have to ever see or even cognize about the other places involved. You will need good advice however, professional advice. This exchange of any sort of existent estate for any other sort of existent estate was not always true. This tax postponement option is not for everyone. Some proprietors should not defer.
We must realize, as well, that there is ALWAYS a hazard of audit.

The larger the dollars involved and the more than than than suspect (according to the IRS) that the participants in the transaction are, the more likely an Internal Revenue Service audited account of the process is. If there are respective million dollars in tax postponement involved, and especially if one or more of the participants are considered audited account targets by the Internal Revenue Service for any reason, you may go involved in an expensive tax audit. The cost of the audit, even if you are successful in defending your decisions, can be far greater than the tax deferments. And if the postponement is disallowed there WILL be penalties, fines, interest and even more than than than significant legal and accounting fees - plus an amended tax return in some cases which may trigger more effects and even more audits. I trust I've made myself quite apparent here - get good advice from legal and accounting specializers on these exchanges.

There is a clip line, for respective of the Acts and effects in exchanges according to the IRS. In improver to timing there are other qualifying or disabling states of affairs and these states of affairs include the usage of the properties, before, during and after the transaction by those involved or their families, friends, associates, etc... In improver to the normal criteria for the exchanges, if Realtors, investors, attorneys, or those who purchase and sell existent estate frequently are involved in exchanges; the Internal Revenue Service do special, more than than restrictive regulations that volition consequence in more examination by the IRS. In fact the Internal Revenue Service tin do up grounds why they believe a individual needs more than scrutiny; that can include political affiliations, human relationships to politicians, your societal position, your association with judges, and conspicuously affluent or well known people and even your spiritual associations and charitable giving recipients. In fact, there can be a tax deferred exchange that volition work for one side of the exchange and not for the other individual or physical thing involved.

In improver the tax tribunal looks at purpose for use, investment, or purchase and sale -- not only the use; past, present and future; of the places involved but what they believe may be or could be the usages and effects based on all kinds of criteria and even intuitions they may have. They also have got extended regulations on what like-kind exchanges are. The exchange must also be interdependent. There may not be any reception or control of cash or other liquid assets from the sale by any of the exchangers. This tin be inclusive of debt relief as well. Any of these things will be taxed. In fact, a refinancing of any property involved within two old age or less volition disallow the tax postponement as well. There are also respective clip bounds and timing criteria involved which must be allowed for and honored.

There are some specific terms; relinquished property and substitution property are the most of import terms; after the most of import unequivocal phrase of all: Like Kind Property Exchange. Large potentiality tax liability can be deferred; that is: NO tax is owed upon reception of the proceeds; from your investing in qualifying existent estate, whether purchasing or selling, can be maximized by deferring the tax liability, the consequences, and using the postponed expenses. That is; you are saving and have got got the usage of the tax money you don't have to pay now, and you can put that money in the adjacent property, giving you a multiplied ability to put and harvest additional benefits of grasp and income. Therefore, you will have got the further money, and therefore further down payment, to put in an even larger property or pay cash for a more than expensive property. This tin change your life; your life as an investor, your business life, at least.

The exchange makes not have got to be simultaneous. You must in general; place the property within 45 years and settle down within 180 days.
There are also delayed exchanges, non coincident exchanges, which are sometimes called Starker Exchanges. There can be a buyer assisted, delayed, Starker exchange. This buyer assisted, delayed exchange, is done with the aid of the buyer - by letting the buyer possess or even dwell in the property for a while. This is almost always a bad idea, a very bad idea. There is also such as a thing as a reverse-Starker exchange. In a Change By Reversal Starker Exchange the substitution property is acquired before the relinquished property is sold. These are rare, unusual, possible and legal - but not to be considered lightly without adequate advocate involved in your every planning facet.

For the protection of all involved; the contracts, all exchange written documents and paperwork should be prepared by specializers in tax deferred transactions. The Realtor should never, ever, set up the exchange documents!

There are some further factors and rules. You can call up to three possible places in that first 45 twenty-four hours period. There is also a regulation called the 200% congeries regulation where you can call severalproperties up to but not more than than 200% of the value of the relinquished property. Property held by a individual who deals in property makes not qualify. Personal residential usage property makes not qualify. Partnership interest in property makes not qualify. Refinanced property will not likely measure up if it have been refinanced in the last two years. The property must ordinarily be held for investing and generally acquired and held for grasp and for production of income such as as rental income.

Let's now look at the sale of personal residences. The addition on a personal abode have no tax owed on the first $250,000 of addition for one individual or $500,000 tax relief for a couple. A rule abode is one that a individual dwells in for 183 years per twelvemonth or more than and no other. Factors which determine a person's rule abode are four; each screening the same residential computer computer address of that beingness claimed: A Driver's License; Magazine, Newspaper, and Internet Subscriptions, Utility Bills such as as Cable TV, Telephone, etc. that are mailed to and show the address as residence, credit card bills, checking and nest egg accounts, elector registration card, personal telephone listing in the achromatic pages.
There are many pages of rules, regulations, code, determinations, tax code, rental and vacancy rules, forsaking according to prescription, determinations of intent, assorted capricious factors known only to peculiar Internal Revenue Service agents, clip lines, divorcement issues, impermanent use, rental, vacancy, or forsaking issues, documented or discoverable purposes on the portion of participants in the transactions, multiple temperaments in short clip periods of time, work related tenancy and vacancy requirements, personal business usage of property, income streams, household uses, wellness related and documented residential move or vacancy requirements, tribunal cases and other recorded facts, all mode of particular demands and issues, land installment contract provisions, miscellaneous extenuating and defendable contingencies - which will impact the bona fide legality and defensibility of a tax deferred transaction. There are many points upon which your planning should be based. There are some emergency planning techniques as well.

You can even take some improvement disbursals and take a hole up disbursal for work done to sell the house. You MUST have: Written affirmation of necessary disbursals that are needed to sell the property. Be able to turn out the work was done within 90 years of the executed contract of sale. There is also, now, a upper limit of 20% taxation on the taxable part of the nett addition on the home. Generally tax laws are applied separately to each individual proprietor or co-owner of the property and each must ran into demands separately and individually.
Take care. Be prepared. Educate yourself and guarantee that your advisors are as well. Be legally and financially, well represented and very professionally and personally wary.

Tips to reduce tax burden

Did you know that:

1. According to law you can reduce your tax liability by hiring family members to carry out work in your business. Pay your children and spouse to perform assigned duties. This way you can shift from higher tax rates to lower ones.

2. Consider hiring independent contractors instead of employees. You will save on payroll taxes. However ensure that you meet the IRS’s criteria.

3. Think about “deferring income” postpone receiving money to January instead of December. This means that payments received will be up for “tax” calculations a year away. However ask your accountant’s advice as the benefits are dependant on profit and losses for the year and your corporate legal structure.

4. Take advantage of tax deductions allowed for charitable donations. Make donations in November or December instead of January so that you can include the donations for tax deductions in the current year.

5. Maximize your expenditure on equipment and office supplies. Buy in advance for a quarter and use the tax deductions allowed in the current fiscal year.

6. Include expenses of business related travel in the current year.

7. Pay all bills due before the end of the year. Payment to cell services, rent, insurance, and utilities related to the business can be included for accounting and applicable tax waivers.

8. Plan a retirement plan and make payments before the end of the year. This will reduce your income for the year and proportionately the tax due. Be sure to check on the limits. Plan a feasible and beneficial strategy with your accountant.

9. Be sure to deduct from your taxable income money paid to licensing fees, businesses taxes, and annual memberships to businesses related organizations. Be sure to deduct interest paid on borrowings for running the business and related fees. Insurance premiums paid to insure the business office and machinery are eligible for tax deductions. Make a list of your memberships and check which ones are eligible for tax deductions.

10. Check whether you have deducted management and administration expenses as well as money spent on maintenance and repairs of equipment. Decide whether a cash accounting system or accrual one will benefit your business. The tax deductions are different depending on the system you use. When setting up your small business take the advice of a tax and accounting professional as to which accounting system would be most suitable.

Business Tax Attorney basics

An attorney is a person who is granted the authority to act in place of another. With respect to a tax attorney, they act for you in communicating your income details to the government. This saves you from having to do it yourself. Competent tax attorneys have been trained to have an expert knowledge of the tax laws in your city, state or country.


No one plans to rack up tens of thousands of dollars of debt with the IRS when they open their business. Most of these problems start small. Little things, like maybe forgetting taxes for one or two payroll periods. Eventually things spiraled out of control. Now you're up to your eyeballs in debt to the IRS with no idea where to turn for help. For serious tax problems, including large IRS debts, payroll and other employment tax problems, you need a tax attorney.

Here are some tips for finding an attorney who can successfully go to bat for you against the IRS. Why you can't go with a typical lawyer Tax law is one of the most complicated fields of law. Taking one or two tax law classes in law school doesn't give an attorney the training or experience necessary to represent you effectively against the IRS. It would be like going to an obstetrician for brain surgery.

They're both doctors, yes, but with very different specialties. Good tax lawyers know the IRS's rules, and they can use those against them. They have specialized data bases/libraries they subscribe to and know how to utilize to have access to the very complicated, and constantly changing, laws and rules governing tax laws and procedures. The stakes are too high to gamble on a lawyer without these specialized tools, training and experience in tax law. If things go wrong, the business you've worked so hard to build could be shut down. You personally could even go to jail. Your CPA can't help you, either CPAs know the day-to-day accounting stuff needed to run a business and to file its tax returns. But when it comes to actually going head-to-head in controversies with the IRS, you need someone with both real litigation training and experience and a broad knowledge of how to deal with tax problems. Also, be advised: you have no confidentiality privilege covering potential criminal liability with your CPA.

In fact, your accountant is required by law to disclose certain accounting errors, which may land you in even bigger trouble. Consider the ramifications of having your CPA called in as the star witness against you if your case goes to trial. Look for specialized education Diplomas don't lie. Look for specific tax experience and training. Look for a lawyer that specializes in tax law, and preferably one who graduated from a highly-rated law school, such as NYU School of Law.

Try to find a lawyer with a Master's law degree specializing in tax law (LL.M. in Taxation). Make sure they are staying current in their field as well. Laws constantly change, and you want to make sure your business doesn't suffer with a tax attorney who's behind the times. References count Ask around. If you know a good lawyer or judge you trust, ask if he or she knows someone who specializes in tax cases who he or she feels comfortable recommending to you. Peer-reviewed ratings, like Martindale-Hubbell, can also give you an idea of what other lawyers are saying about the one you're considering hiring. Ask what the Better Business Bureau has to say about the lawyer.

Field experience is absolutely necessary Any time you have a controversy or a fight, you want a litigator. If you have a dangerous or complicated controversy with the IRS, your tax lawyer should also have extensive litigation experience, though very few do. You need someone who has real training and experience in dealing with conflicts and proceedings with someone who's after you. A significant reason why the IRS settles is because they have to consider the hazard of litigation. They are going to want to get things settled and avoid a lengthy court battle -- but only if your case poses a risk to them. You need a credible threat of being able to go to court and really stand up to the IRS to get leverage to make them settle.

Holographic will in california

In California, you can make a will in one of three ways:
A will prepared by a California lawyer. A qualified estate planning lawyer can make sure that your will conforms with California law. The California attorney can also offer suggestions and help you understand the many ways that property can be transferred to or for the benefit of your beneficiaries. I, as a California lawyer, can also help you develop a complete estate plan and offer alternative plans which may save taxes. This kind of planning can be extremely helpful and economical in the long run for you and your beneficiaries. No matter what kind of will you use, the will should be solely your will and not a joint will with your spouse or any other person.
Also, keep in mind that your will is not a living will. The term living will is used in many states to describe a legal document stating that you do not want life-sustaining treatment if you become terminally ill or permanently unconscious

A statutory will. California law provides for a “fill-in-the-blanks” will form. The will form is designed for people with relatively small estates. If there is anything you do not understand or if you are making any provisions which are complicated or unusual, you should ask a qualified lawyer to advise you.

A handwritten or holographic will. This will must be completely in your own handwriting. You must date and sign the will. Your handwriting has to be legible, and the will must clearly state what you are leaving and to whom. A handwritten will does not have to be notarized or witnessed. However, any typed material in a handwritten will may invalidate the will. A typed will must be signed by two witnesses. It is a good idea to consult with a qualified lawyer to make sure your will conforms with California law and does not have any unintended consequences.
Richard Lewis Brown (Professor of Law, University of Nevada, Las Vegas) has published "The Holograph Problem--The Case Against Holographic Wills", in 74 Tenn. L. Rev. 93 (2006).
Here is the introduction:

Holographic wills are a problem on several different levels. They are a problem to the coherence of the law of wills, to the decedents who have relied on them to guide the distribution of their estates, and to the court systems that must grapple with their chronic issues of validity and interpretation.

Holographic wills are entirely or largely in the handwriting of the decedent. Yet the term “holographic will” is not simply descriptive of the form of the will or whether it is handwritten, typed, or printed. Rather, it is a term of considerable legal significance.
In just over half of the states, a will that qualifies as a holographic will can be admitted to probate without attestation. As a result, statutes that authorize holographic wills create an exception to the nearly universal rule that a valid will must be witnessed.

Holographic will statutes are not simply anachronisms fading quietly out of favor. In fact, over the last half-century, there has been a modest increase in the number of states authorizing holographic wills. In these states, a motley parade of home crafted documents have been admitted to probate, ranging from hand completed pre-printed will forms, to excerpts from the most casual of letters, to a handwritten note on the back of a receipt, to informal notes, to eight handwritten words on the back of a greeting card, to a handwritten marriage contract. More troubling, similarly artless instruments that almost certainly were intended by their creators to be valid wills have been denied probate.

Why do many states authorize the creation of such problematic wills? The announced purpose is to allow for the creation of valid wills by those who are unable or unwilling to obtain the professional assistance of a lawyer. But in doing so, holographic will statutes have constituted a legislative invitation to create homemade wills. Therein lies the fundamental problem with holographic wills; they are invariably homemade, either in whole-as in the common case of a totally handwritten will, letter, or memorandum that is submitted for probate as a holographic will-or in part-as in the common case of handwritten entries on pre-printed will forms. Because they are invariably homemade, holographic wills present a range of chronic and unnecessary problems.

Part II of this Article places holographic wills in the context of the broader law of wills, including a brief discussion of the goals of the law of wills, the functions of the required formalities of execution, and the evolving movement toward “deformalizing” the law of wills. This is most notably evidenced by the development of the substantial compliance doctrine and the dispensing power.

Part III outlines and provides examples of significant problems inherent in holographic wills, including their susceptibility to invalidation and frequent issues of interpretation.

Part IV focuses on the central weakness of holographic wills-the fact that they are invariably homemade, drafted by amateurs without professional advice, and executed without any formalities.

Part IV, further argues that by encouraging the creation of such problematic testamentary instruments, statutes that authorize holographic wills undermine the ability of testators to effectuate their testamentary intentions.

Finally, Part V makes three proposals: First, that statutes authorizing holographic wills be repealed; second, that states avoid the unnecessary invalidation of imperfectly executed wills-including handwritten, un-witnessed wills that are unlikely to be completely eradicated by the repeal of holographic will statutes-by adopting the substantial compliance doctrine or the dispensing power; and, third, that state legislatures and the practicing bar provide more satisfactory mechanisms than holographic wills for lawyer-resistant testators who currently use holographic wills.

chicago case

The end of the Operation Family Secrets trial in Chicago has also brought an end
to one of the government's secret weapons against the mob.

The secret weapon has a name: John Scully.

For 25 years, Mr. Scully has been a gangbuster for the United States attorney in
Chicago, a workhorse prosecutor who put away dozens of organized crime figures
with piercing arguments, a devotion to justice and a gentlemanly style.

Scully timed his retirement for the end of the Family Secrets trial last week. He
talked with the I-Team about the case and his career.

"The family secrets trail that just ended, was that the highlight of your career,
would you say?" ABC7's Chuck Goudie asked.

"Yes," Scully answered. John Scully is a man of few words, maybe because those he
does speak carry so much weight.

Just ask Joey "The Clown" Lombardo, Frank "The Breeze" Calabrese and "Little
Jimmy" Marcello, three of the Chicago Outfit bosses who Scully helped to convict
last month of their roles in decades of criminal rackets and eleven long-unsolved
gangland murders.

"There have been very few mob murders solved over the years," Scully said. "This
is the result of the work of an awful a lot of people for an awful long period of
time, resulted in basically in the solving of a number of cases."

After the Family Secrets victory last week, Scully's retirement was one of the
first things they noted. "I can't think of retiring on a higher note," said Pat
fitzgerald, U.S. Attorney.

Sixty-year old Scully is a South Sider who graduated from De LaSalle High School.
He attended the Naval Academy and was assigned to ship duty during the Vietnam War
aboard the U.S.S. Hull, a destroyer that put Captain Scully right off the coast of
vietnam for months.

When Scully received his law degree from the University of San Diego after the
war, his enemies changed, from the North Vietnamese to North Side Chicago mobsters
and their outfit brethren on 26th Street, from Grand Avenue, Cicero and Elmwood
Park.

In 1993, Scully prosecuted the On Leong gambling ring based in Chinatown, a major
case that exposed payoffs to the mob, Chicago police and even a Cook County judge.

Five years ago, he took down William Hanhardt, the once-successful chief of
detectives for the Chicago police. Hanhardt was sentenced to 15 years for
operating a nationwide jewelry theft ring, and he was an outfit operative with a
badge.

"A perfect cop in the mind of an awful amount of people. He cleared so many cases
and did police work that resulted in a number of people being prosecuted and being
prosecuted legitimately," Scully said. "He just never took his skills against the
Chicago Outfit."

At the time Hanhardt went to prison, Scully was already working on a
cloak-and-dagger investigation targeting the upper crust of the outfit.
It began with a letter from Frank Calabrese Jr., son of mob boss "Frank the
Breeze." It was a letter so secret that Scully's long-time trial partner, Mitch
Mars, didn't reveal it to others in the office for months.

"What was the danger at that point?" Goudie asked.

"Frank Jr. was cooperating, and it was going to be against his father who was a
killer in the Chicago mob," Scully answered.

In 2002, with Frank Jr. still undercover, his uncle Nick Calabrese stunned
prosecutors by offering to cooperate as well, admitting that he had committed at
least 14 mob hits. "There was not the realization on the part on our office or the
FBI that he had been involved with murders," Scully said.

Scully said he is amazed that murderer Joey "the Clown" Lombardo took the witness
stand and tried to talk his way out of the charges.

"As you sat there and looked at him, could you get the clown image out of your
head?" Goudie asked. "No, I didn't have the image of Joey 'The Clown,' I had the
image of Danny Seifert," Scully said.

Seifert was the Bensenville business owner that Lombardo murdered in 1974 to
prevent him from testifying in a case that Scully had assisted.

"Did you feel threatened by these people?" Goudie asked.

" No, that has never been a part of the Chicago outfit's background, at least in
recent years, over the last 30 or 40 years& going after agents, going after
prosecutors, going after police officers," Scully said.

Scully's retirement became effective while the jury was deliberating. He was given
special permission to remain at the government table. Then when the verdicts came
in, he packed up and went home.

Scully said he has no plans for the big salaries that some of his colleagues
receive after retiring to private practice. He plans to spend time with his
grandchildren.

Life annuity

The life annuity (also known as a single-payment annuity) is a financial instrument that allows for a seller (issuer) - typically a financial institution such as a life insurance company - to make a series of payments in the future to the buyer (annuitant) in exchange for an immediate payment of a known sum with a certain net present value. The payment stream from the issuer to the annuitant has an unknown duration based principally upon the life expectancy of the annuitant. Generally, such an instrument stops payment at the death of the annuitant. However, it is possible to structure a life annuity so that the payments instead only stop upon the death of a second of two annuitants (i.e., a joint and survivor annuity); sometimes the instrument reduces the payments to the second annuitant.

The "pure" life annuity can have harsh consequences for an annuitant who dies before recovering their investment in the annuity. The risks of such a situation, called a "forfeiture", can be ameliorated by the addition of a added clause under which the annuity issuer is required to make annuity payments for at least a certain number of years (the "period certain"); if the annuitant outlives the specified period certain, annuity payments then continue until the annnuitant's death, and if the annnuitant dies before the expiration of the period certain, the annuitant's estate or beneficiary is entitled to collect the remaining payments certain. The tradeoff between the pure life annuity and the life-with-period-certain annuity is in exchange for the reduced risk of loss, the annuity payments for the latter will be smaller.

Annuity

An annuity contract is a financial product, typically offered by a financial institution, that may accumulate value and take a current value and pay it out over a period of years. These contracts are regulated by various jurisdictions and this has led to the term being focused on different features in different parts of the world.

In the US, an "annuity" generally refers to a deferred investment contract that, upon "annuitization," will make regular payments (e.g., on a monthly or annual basis) to a person (called the "annuitant") for a period certain, over one or more specified individuals' lifetimes, or over a combination of life and a period certain.
Such contracts provide an income during retirement or a stream of payments as a settlement of a personal injury lawsuit (i.e., a structured settlement). Some annuities (called "joint life" or "joint and survivor" annuities) continue paying a second person (i.e., the "beneficiary") after the annuitant dies, until that person dies as well. (For example, an annuity may be structured to make payments to a married couple, such payments ceasing on the death of the second spouse.)
Annuities that make payments in fixed amounts or in amounts that increase by a fixed percentage are called fixed annuities. Variable annuities, by contrast, pay amounts that vary according to the investment performance of a specified set of investments, typically bond and equity mutual funds.
Variable annuities are used for many different objectives. One common objective is deferral of the recognition of taxable gains. Money deposited in a variable annuity grows on a tax-deferred basis, so that taxes on investment gains are not due until a withdrawal is made. Variable annuities offer a variety of funds ("subaccounts" in the parlance of the industry) from various money managers. This gives investors the ability to move between subaccounts without incurring additional fees or sales charges.
An annuity is an insurance product; annuities are typically issued by the same companies that issue life insurance policies, and the risks undertaken by the issuer are fundamentally the same for both products -- that is, the insurance company bets on the life expectancy of the customer. The result is to transfer the effects of the uncertainty of an individual's lifespan from the individual to the insurer, which reduces its own uncertainty by pooling many clients.
With a "single premium" or "immediate" annuity, the annuitant pays for the annuity with a single lump sum. The annuity starts making regular payments to the annuitant within a year. A common use of a single premium annuity is as a destination for roll-over retirement savings upon retirement. In such a case, a retiree withdraws all of the money the retiree has saved in, (i.e., tax-advantaged) savings vehicle during the retiree's working life and uses the money to buy an annuity whose payments will replace the retiree's wage payments for the rest of the retiree's life. The advantage of such an annuity is that the annuitant has a guaranteed income for life, whereas if the retiree were instead to withdraw money regularly from the retirement account, the retiree might run out of money before the retiree dies or not have as much to spend while the retiree is alive.
Another kind of annuity is a combination of retirement savings and retirement payment plan: the annuitant makes regular contributions to the annuity until a certain date and then receives regular payments from the annuity until the annuitant dies. Sometimes there is a life insurance component added so that if the annuitant dies before annuity payments begin, a beneficiary gets either a lump sum or annuity payments.

whereas

In the UK, the term "annuity" generally refers to the actual contract that makes payments. Commonly it is used to refer to a contract that is making payments (with the means of saving being referred to as a "pension"). In Britain the conversion of pension income into an annuity is essentially compulsory and this has led to a large market for annuities)


You never know when you are going to need a huge amount of money. You have gone in for an annuity plan that will be giving you a fixed amount of money for a certain period of time. When you realize that you need the money immediately, you go in for structured settlement annuity plan.

Having a home is the one thing that gives property owners a great feeling of accomplishment and creates a positive attitude towards life as well. Owning a property not only represents a physical shelter and a place to share the best memories with the ones that we love but it can also be a financial shelter for many unexpected problems that can befall us.

Just because you have received a structured settlement for your lawsuit or insuracne claim, it does not mean you have to wait years to get the money you have comming to you. There are several settlement purchasing companies that will give you quick cash for your structured settlement.

Types of insurances

Any risk that can be quantified can potentially be insured. Specific kinds of risk that may give rise to claims are known as "perils". An insurance policy will set out in detail which perils are covered by the policy and which are not.
Below is a (non-exhaustive) list of the many different types of insurance that exist. A single policy may cover risks in one or more of the categories set forth below. For example, auto insurance would typically cover both property risk (covering the risk of theft or damage to the car) and liability risk (covering legal claims from causing an accident). A homeowner's insurance policy in the U.S. typically includes property insurance covering damage to the home and the owner's belongings, liability insurance covering certain legal claims against the owner, and even a small amount of health insurance for medical expenses of guests who are injured on the owner's property.

Automobile insurance, known in the UK as motor insurance, is probably the most common form of insurance and may cover both legal liability claims against the driver and loss of or damage to the insured's vehicle itself. Throughout most of the United States an auto insurance policy is required to legally operate a motor vehicle on public roads. In some jurisdictions, bodily injury compensation for automobile accident victims has been changed to a no-fault system, which reduces or eliminates the ability to sue for compensation but provides automatic eligibility for benefits. Credit card companies insure against damage on rented cars.

Aviation insurance insures against hull, spares, deductible, hull war and liability risks.

Boiler insurance(also known as boiler and machinery insurance or equipment breakdown insurance) insures against accidental physical damage to equipment or machinery.

Builder's risk insurance insures against the risk of physical loss or damage to property during construction. Builder's risk insurance is typically written on an "all risk" basis covering damage due to any cause (including the negligence of the insured) not otherwise expressly excluded.

Business insurance can be any kind of insurance that protects businesses against risks. Some principal subtypes of business insurance are (a) the various kinds of professional liability insurance, also called professional indemnity insurance, which are discussed below under that name; and (b) the business owners policy (BOP), which bundles into one policy many of the kinds of coverage that a business owner needs, in a way analogous to how homeowners insurance bundles the coverages that a homeowner needs

Casualty insurance insures against accidents, not necessarily tied to any specific property.

Credit insurance repays some or all of a loan back when certain things happen to the borrower such as unemployment, disability, or death. Mortgage insurance (which see below) is a form of credit insurance, although the name credit insurance more often is used to refer to policies that cover other kinds of debt.

Crime insurance insures the policyholder against losses arising from the criminal acts of third parties. For example, a company can obtain crime insurance to cover losses arising from theft or embezzlement.

Crop insurance "Farmers use crop insurance to reduce or manage various risks associated with growing crops. Such risks include crop loss or damage caused by weather, hail, drought, frost damage, insects, or disease, for instance

Defense Base Act Workers' compensation or DBA Insurance insurance provides coverage for civilian workers hired by the government to perform contracts outside the US and Canada. DBA is required for all US citizens, US residents, US Green Card holders, and all employees or subcontractors hired on overseas government contracts. Depending on the country, Foreign Nationals must also be covered under DBA. This coverage typically includes expenses related to medical treatment and loss of wages, as well as disability and death benefits.

Directors and officers liability insurance protects an organization (usually a corporation) from costs associated with litigation resulting from mistakes incurred by directors and officers for which they are liable. In the industry, it is usually called "D&O" for short.

Disability insurance policies provide financial support in the event the policyholder is unable to work because of disabling illness or injury. It provides monthly support to help pay such obligations as mortgages and credit cards.

Total permanent disability insurance insurance provides benefits when a person is permanently disabled and can no longer work in their profession, often taken as an adjunct to life insurance.
Errors and omissions insurance: See "Professional liability insurance" under "Liability insurance".

Expatriate insurance provides individuals and organizations operating outside of their home country with protection for automobiles, property, health, liability and business pursuits.

Financial loss insurance protects individuals and companies against various financial risks. For example, a business might purchase cover to protect it from loss of sales if a fire in a factory prevented it from carrying out its business for a time. Insurance might also cover the failure of a creditor to pay money it owes to the insured. This type of insurance is frequently referred to as "business interruption insurance." Fidelity bonds and surety bonds are included in this category, although these products provide a benefit to a third party (the "obligee") in the event the insured party (usually referred to as the "obligor") fails to perform its obligations under a contract with the obligee.
Fire insurance: See "Property insurance".
Hazard insurance: See "Property insurance".
Health insurance policies will often cover the cost of private medical treatments if the National Health Service in the UK (NHS) or other publicly-funded health programs do not pay for them. It will often result in quicker health care where better facilities are available.
Kidnap and ransom insurance

Liability insurance is a very broad superset that covers legal claims against the insured. Many types of insurance include an aspect of liability coverage. For example, a homeowner's insurance policy will normally include liability coverage which protects the insured in the event of a claim brought by someone who slips and falls on the property; automobile insurance also includes an aspect of liability insurance that indemnifies against the harm that a crashing car can cause to others' lives, health, or property. The protection offered by a liability insurance policy is twofold: a legal defense in the event of a lawsuit commenced against the policyholder and indemnification (payment on behalf of the insured) with respect to a settlement or court verdict. Liability policies typically cover only the negligence of the insured, and will not apply to results of willful or intentional acts by the insured.

Environmental liability insurance protects the insured from bodily injury, property damage and cleanup costs as a result of the dispersal, release or escape of pollutants.

Professional liability insurance, also called professional indemnity insurance, protects professional practitioners such as architects, lawyers, doctors, and accountants against potential negligence claims made by their patients/clients. Professional liability insurance may take on different names depending on the profession. For example, professional liability insurance in reference to the medical profession may be called malpractice insurance. Notaries public may take out errors and omissions insurance (E&O). Other potential E&O policyholders include, for example, real estate brokers, home inspectors, appraisers, and website developers.

Life insurance provides a monetary benefit to a decedent's family or other designated beneficiary, and may specifically provide for income to an insured person's family, burial, funeral and other final expenses. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity.
Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies and regulated as insurance and require the same kinds of actuarial and investment management expertise that life insurance requires. Annuities and pensions that pay a benefit for life are sometimes regarded as insurance against the possibility that a retiree will outlive his or her financial resources. In that sense, they are the complement of life insurance and, from an underwriting perspective, are the mirror image of life insurance.
Locked funds insurance is a little-known hybrid insurance policy jointly issued by governments and banks. It is used to protect public funds from tamper by unauthorized parties. In special cases, a government may authorize its use in protecting semi-private funds which are liable to tamper. The terms of this type of insurance are usually very strict. Therefore it is used only in extreme cases where maximum security of funds is required.

Marine insurance and marine cargo insurance cover the loss or damage of ships at sea or on inland waterways, and of the cargo that may be on them. When the owner of the cargo and the carrier are separate corporations, marine cargo insurance typically compensates the owner of cargo for losses sustained from fire, shipwreck, etc., but excludes losses that can be recovered from the carrier or the carrier's insurance. Many marine insurance underwriters will include "time element" coverage in such policies, which extends the indemnity to cover loss of profit and other business expenses attributable to the delay caused by a covered loss.

Mortgage insurance insures the lender against default by the borrower.

National Insurance is the UK's version of social insurance (which see below).

No-fault insurance is a type of insurance policy (typically automobile insurance) where insureds are indemnified by their own insurer regardless of fault in the incident.
Nuclear incident insurance covers damages resulting from an incident involving radioactive materials and is generally arranged at the national level.

Pet insurance insures pets against accidents and illnesses - some companies cover routine/wellness care and burial, as well.

Political risk insurance can be taken out by businesses with operations in countries in which there is a risk that revolution or other political conditions will result in a loss.

Pollution Insurance. A first-party coverage for contamination of insured property either by external or on-site sources. Coverage for liability to third parties arising from contamination of air, water, or land due to the sudden and accidental release of hazardous materials from the insured site. The policy usually covers the costs of cleanup and may include coverage for releases from underground storage tanks. Intentional acts are specifically excluded

Property insurance provides protection against risks to property, such as fire, theft or weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, inland marine insurance or boiler insurance.

Protected Self-Insurance is an alternative risk financing mechanism in which an organisation retains the mathematically calculated cost of risk within the organisation and transfers the catastrophic risk with specific and aggregate limits to an Insurer so the maximum total cost of the program is known. A properly designed and underwritten Protected Self-Insurance Program reduces and stabilizes the cost of insurance and provides valuable risk management information.

Purchase insurance is aimed at providing protection on the products people purchase. Purchase insurance can cover individual purchase protection, warranties, guarantees, care plans and even mobile phone insurance. Such insurance is normally very limited in the scope of problems that are covered by the policy.

Retrospectively Rated Insurance is a method of establishing a premium on large commercial accounts. The final premium is based on the insured's actual loss experience during the policy term, sometimes subject to a minimum and maximum premium, with the final premium determined by a formula. Under this plan, the current year's premium is based partially (or wholly) on the current year's losses, although the premium adjustments may take months or years beyond the current year's expiration date. The rating formula is guaranteed in the insurance contract. Formula: retrospective premium = converted loss + basic premium × tax multiplier. Numerous variations of this formula have been developed and are in use.

Self Insurance is protection against loss by setting aside one's own money. This can be done on a mathematical basis by establishing a separate fund into which funds are deposited on a periodic basis. Through self insurance it is possible to protect against high-frequency low-severity losses. To do this through an insurance company would mean having to pay a premium that includes loadings for the company's general expenses, cost of putting the policy on the books, acquisition expenses, premium taxes, and contingencies.

Social insurance can be many things to many people in many countries. But a summary of its essence is that it is a collection of insurance coverages (including components of life insurance, disability income insurance, unemployment insurance, health insurance, and others), plus retirement savings, that mandates participation by all citizens. By forcing everyone in society to be a policyholder and pay premiums, it ensures that everyone can become a claimant when or if he/she needs to. Along the way this inevitably becomes related to other concepts such as the justice system and the welfare state. This is a large, complicated topic that engenders tremendous debate, which can be further studied in the following articles (and others):

Social welfare provision
Social security
Social safety net
National Insurance
Social Security (United States)
Social Security debate (United States)

Stop-loss insurance provides protection against catastrophic or unpredictable losses. It is purchased by organisations who do not want to assume 100% of the liability for losses arising from the plans. Under a stop-loss policy, the insurance company becomes liable for losses that exceed certain limits called deductibles.
Surety Bond insurance is a three party insurance guaranteeing the performance of the principal.
Terrorism insurance provides protection against any loss or damage caused by terrorist activities.

Title insurance provides a guarantee that title to real property is vested in the purchaser and/or mortgagee, free and clear of liens or encumbrances. It is usually issued in conjunction with a search of the public records performed at the time of a real estate transaction.

Travel insurance is an insurance cover taken by those who travel abroad, which covers certain losses such as medical expenses, lost of personal belongings, travel delay, personal liabilities, etc.

Insurance

Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium. Insurer, in economics, is the company that sells the insurance. Insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice

Commercially insurable risks typically share seven common characteristics

A large number of homogeneous exposure units. The vast majority of insurance policies are provided for individual members of very large classes. Automobile insurance, for example, covered about 175 million automobiles in the United States in 2004.The existence of a large number of homogeneous exposure units allows insurers to benefit from the so-called “law of large numbers,” which in effect states that as the number of exposure units increases, the actual results are increasingly likely to become close to expected results. There are exceptions to this criterion. Lloyd's of London is famous for insuring the life or health of actors, actresses and sports figures. Satellite Launch insurance covers events that are infrequent. Large commercial property policies may insure exceptional properties for which there are no ‘homogeneous’ exposure units. Despite failing on this criterion, many exposures like these are generally considered to be insurable.

Definite Loss. The event that gives rise to the loss that is subject to insurance should, at least in principle, take place at a known time, in a known place, and from a known cause. The classic example is death of an insured on a life insurance policy. Fire, automobile accidents, and worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory. Occupational disease, for instance, may involve prolonged exposure to injurious conditions where no specific time, place or cause is identifiable. Ideally, the time, place and cause of a loss should be clear enough that a reasonable person, with sufficient information, could objectively verify all three elements.

Accidental Loss. The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be ‘pure,’ in the sense that it results from an event for which there is only the opportunity for cost. Events that contain speculative elements, such as ordinary business risks, are generally not considered insurable.

Large Loss. The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses these latter costs may be several times the size of the expected cost of losses. There is little point in paying such costs unless the protection offered has real value to a buyer.

Affordable Premium. If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered, it is not likely that anyone will buy insurance, even if on offer. Further, as the accounting profession formally recognizes in financial accounting standards (See FAS 113 for example), the premium cannot be so large that there is not a reasonable chance of a significant loss to the insurer. If there is no such chance of loss, the transaction may have the form of insurance, but not the substance.

Calculable Loss. There are two elements that must be at least estimable, if not formally calculable: the probability of loss, and the attendant cost. Probability of loss is generally an empirical exercise, while cost has more to do with the ability of a reasonable person in possession of a copy of the insurance policy and a proof of loss associated with a claim presented under that policy to make a reasonably definite and objective evaluation of the amount of the loss recoverable as a result of the claim.

Limited risk of catastrophically large losses. The essential risk is often aggregation. If the same event can cause losses to numerous policyholders of the same insurer, the ability of that insurer to issue policies becomes constrained, not by factors surrounding the individual characteristics of a given policyholder, but by the factors surrounding the sum of all policyholders so exposed. Typically, insurers prefer to limit their exposure to a loss from a single event to some small portion of their capital base, on the order of 5 percent. Where the loss can be aggregated, or an individual policy could produce exceptionally large claims, the capital constraint will restrict an insurers appetite for additional policyholders. The classic example is earthquake insurance, where the ability of an underwriter to issue a new policy depends on the number and size of the policies that it has already underwritten. Wind insurance in hurricane zones, particularly along coast lines, is another example of this phenomenon. In extreme cases, the aggregation can affect the entire industry, since the combined capital of insurers and reinsurers can be small compared to the needs of potential policyholders in areas exposed to aggregation risk. In commercial fire insurance it is possible to find single properties whose total exposed value is well in excess of any individual insurer’s capital constraint. Such properties are generally shared among several insurers, or are insured by a single insurer who syndicates the risk into the reinsurance market

Attorney

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