The best financial planners advise their clients to be prepared for life’s events, planned ones as well as surprise ones.

Some of us are more able to plan for life’s twists and turns, but most of us do not have the financial assets to prepare in advance for life’s expenses, it doesn’t matter if they are expected, such as weddings, or if they are unexpected surprises, such as medical emergencies or a collapse in the housing market.

Financial planners recognize that life comes with surprises. As Mr. Rick Annaert, President and CEO of Manulife Securities, an affiliate company of John Hancock Financial Services, said in a recent interview, “You can’t prepare for all of life’s events, of course”.  He explained that “Life is better when you’re prepared. Financial planning helps you prepare for life’s most significant events – your children’s education, the wedding of a son or daughter, your lifestyle in retirement, being able to care for your elders. You can’t prepare for all of life’s events of course, but when you identify and plan for most of them, life is just better. Financial planning makes that happen.” **

Financial planners say that having a financial plan helps families to be prepared for planned or voluntary financial obligations like weddings and kids’ college expenses, as well as for unplanned or involuntary financial obligations such as an illness or losing a job or helping a family member.  A completely ready financial plan is a wonderful objective for all of us to try to have, but most people live life without having the cash in the bank to deal with life’s unexpected events and changes.

In this sense, annuitants receiving structured settlement payments are among the fortunate few who have assets they can access in times of need or financial stress.

According to Jane Olshewksi, manager of Investors Group Financial planning programs, families need to be prepared for “life’s bumps and bruises – unanticipated changes such as a serious illness or a job loss, for example, have financial consequences”. **

In fact, annuitants who sell their payments are just dealing with the inevitability that many financial planners see as their most important job – preparing for the unexpected.  We all have to deal with life’s changes and surprises.

None of us has a crystal ball so we cannot be ready for every change, but we all want to be able to react to changes. Some of us may have to sell our investments, or sell our house, or take out a loan – or sell our structured settlement payments.  Annuitants are just doing what we all do: trying to react to life’s changes in the best possible way we can.

Only 1 – 2% of structured settlement payments are sold each year, and it seems reasonable that 1 -2% of annuitants need an escape mechanism to deal with unexpected changes in life’s events, especially in a world of 10% unemployment.

It seems reasonable to us that as long as annuitants are dealt with fairly and reasonably, then what they are doing is ok. The problem is how it is done.

In other words, in times of need, it’s not selling structured settlement payments that is the problem, it’s selling too many payments or selling for too little money that is the problem.

Strategic Capital is here to help annuitants deal with life’s changes. Please call to speak to our experts should you have any questions 1-866-256-0088.

Workers compensation payments and minor or child structured settlement payments are hard and sometimes impossible to transfer to a purchaser.

Workers compensation settlements

The laws regarding workers compensation settlements are very different from state to state. Not only are the worker’s compensation laws different, but the laws that rule whether one can sell or not sell are very different from state to state.  For this reason, it is not possible to develop a “standard” model for the sale of annuity payments that were acquired as a result of workers comp settlements because these payments are governed not only by the structured settlement protection statutes, but also by state specific workers comp statutes that are in effect. So, even though a particular state may allow for the sales of one’s structured settlement payments, the same state may not allow for this type of sale if it is the result of a worker’s comp settlement. That being said, each workers comp settlement must be evaluated on a case-by-case basis, before determining if a purchase is possible.

For example, in Ohio, the structured settlement protection act includes worker’s comp payments as being assignable, but the worker’s comp laws in Ohio specifically prohibit these payments from being assigned. On the other hand, in Ohio, worker’s comp payments are able to be sold for a lump sum because both the worker’s comp laws and the structured settlement protection act indicate that the payments are assignable.

Minor or children’s cases

Often, a minor (anyone under the age of 18) will have been awarded structured settlement payments to compensate the child for the loss of a parent, or for an injury or other damage that the child had to endure.

Sometimes, these annuitants consider selling their payments after they have reached the age of majority, which is most often the age of 18. In these cases, the person is assumed under the law to be able to make his or her own decision, and the court regards the sellers as it would any other adult.

Strategic Capital has helped many clients who were awarded the payments when they were children and then decided to or needed to sell some of their structured payments as adults.

In a number of other cases, we have been approached to buy structured settlement payments from an annuitant who is not yet 18, and therefore still a child. We proceed very carefully and methodically in these cases. Usually, the parent or other guardian of the child is initiating the sale of the payments. And 90% of the time, the parent or guardian wants to sell the payments for the benefit of the child, to give the child a better education, to deal with an unexpected medical expense of the child or, in one case, to send the teenage child to a special rehab program for drug abusers.

It is very important for us and the court to understand exactly why the sale is taking place. The court especially will want to know that the lump sum will be used for the child’s benefit and that the parent or guardian is not selling the payments for their own benefit so that the child will no longer have the promised payments when they reach adulthood. Occasionally a special guardian, a guardian will be appointed by the court to have a second opinion of the reason for the sale of payments. Sometimes the guardian will agree with the sale and sometimes will disagree. We do not deal with parents or guardians on behalf the children unless we feel that the reason for the sale is for the benefit of the child, and, as always, we try to structure the transaction so as to minimize the impact on the original structured settlement.

If you have a Minor OR child’s structured settlement case or a worker’s compensation structured settlement, please Call to discuss the details with a Strategic Capital Expert. Call us at 1-866-256-0088