Program Illustrations

Financial and Insurance Program Comparisons

The financial industry offers a host different investment options for your clients who may be facing difficult life circumstances. In addition to the various investment options, these individuals must also carefully consider the variables that are attached to these options and how these variables may impact their financial future. Comparing all of the options before making a decision will help ensure the security of your client’s financial future.

Financial Benefits of a Structured Settlement

When receiving the settlement as a single lump sum, precious dollars are lost to taxes that could have otherwise been deferred and leveraged for future growth. Simply settling for cash does not yield as much money as a structured settlement annuity.With periodic payments from a structured settlement, the plaintiff is able to defer taxation on the entire amount and allow 100% of the funds to be invested.

Lump Sum Cash Settlement vs. Structured Settlement

Please note that this scenario assumes a non-qualified transaction rather than a qualified structured settlement. By choosing this option, the claimant will pay taxes on future periodic payments. This tax deferral strategy will greatly enhance the taxable equivalent return. 

Maximize Income for Attorneys

Since 1996, federal courts have recognized an attorney’s ability to defer taxation of his or her fees by using an attorney fee structure. An attorney fee structure is a method of deferring income and taxation on the current year’s earned fees, while at the same time guaranteeing future income for retirement, children’s education, or other anticipated needs. Millennium Settlements offers several types of options for attorneys who want to defer income and taxes.

Tax Impact of Attorney Fees

By choosing a structured settlement, the attorney will pay taxes on future periodic payments. This tax deferral strategy will greatly enhance the taxable equivalent return. 

Tax Advantages of a Structured Settlement

The charts below demonstrate how much interest you would have to earn in a taxable investment to equal the tax-free structure and the net rate of return you earn on taxable investments. The figures do not include state income taxes, which would make the difference even greater.

Taxable Equivalent Yield

Compare the higher taxable interest required to equal tax-free structure accumulation at various structure internal rates of return.

Net Taxable Yields

This table shows the after-tax yields on a taxable interest rate. Would you be better off with a structure?

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