Four Structured Settlement Questions and Answers

Tax Act

If you have recently come into a large sum of money, you may want to think about setting up a structured settlement instead of receiving a lump sum. While this option isn’t for everyone, it can be beneficial when it comes to budgeting, and paying less tax on your earnings.

Here is a four-question guide to structured settlements.

1. What is a structured settlement?

A structured settlement is when you receive periodic payments for the money awarded in a lawsuit that you have won. It is “structured” because you are agreeing to receive a set amount of that money each month, week or year, and it is a “settlement” because you typically received the money as the result of a settled lawsuit.

2. What if I want/need a lump sum?

Although structured settlement payments have a lot of benefits, it’s also entirely possible to receive a lump sum. One way to do this is to sell lottery payments or other kinds of earnings to a financial assistance company. In exchange for a portion of your earnings, you can get the large chunk of money that you need very quickly.

This can be a good option if you have a lot of debt to pay off, college tuition that needs to be paid before the semester begins or medical bills that add up with interest if they’re put off.

3. What if I need money before my lawsuit case ends?

If you don’t want to take a lump sum, but still need money before your lawsuit comes to an official close, you can often get pre settlement funding from financial assistance institutions.

Some reasons that you may need funding ahead of time include urgent medical bills, car repair in the event of an accident and more. Sometimes, you just can’t wait for the money, and thus, a cash amount is necessary. It’s possible to get between $1,000 and $30,000 in advance. You simply borrow from financial funding companies beforehand and give them a portion of your reward once it’s received.

4. Are there benefits of receiving an annuity payment over a lump sum?

Yes, there are benefits to receiving annuity payments. One of these is tax-related. If you get a lump sum and invest it all at once, you will be taxed on the dividends of your investment. On the other hand, if you receive payments and use them for expenses and purchases, they become tax-free.

It’s also much easier for some people to budget when they have a stream of equal-sum payments coming in periodically. This can help you plan your financial life much easier.

If you are interested in learning about how you can convert a lump sum to structured settlement payments, or vice versa, research online now.

 

There are many things Brian enjoys writing about, but one of his favorites is finances. If you’d like more information regarding Sell Lottery Payments, please visit http://www.senecaone.com/

How to Avoid Meeting the Inheritance Tax Threshold

Tax Act

Did you know that whenever anyone dies, the money and the property which is left to the beneficiaries are subject to an inheritance tax? This tax is usually 40% of anything above the threshold, which in the UK at the moment is £325,000.

However, if you are like most people you will not want to see a large chunk of your inheritance go towards taxes. Luckily, there are ways that you can avoid meeting the inheritance tax threshold and not have to pay. Effectively planning your inheritance can save your family hundreds of thousands of pounds.

As house prices have increased over the years but the inheritance tax threshold has not, more people than ever have been liable to pay it. To avoid this, you will need to split up your estate in your will so that you can make sure that each of your loved ones inherits an amount which is under the threshold.

Leaving Money to Your Spouse or Civil Partner

Did you know that if you leave your money to your spouse or civil partner, they will be exempt from paying inheritance tax on any of it? This can be a way for you to pass along your estate without having to worry about meeting the inheritance tax threshold. In the future when your partner dies, the estate will be subject to an inheritance tax threshold again, but the threshold will be higher at $650,000.

Setting up a Trust

Many people place their money in a trust fund in order to avoid paying inheritance tax. Although this was a very popular method in the past, the HMRC has become aware of this practice and has been cracking down on using trusts for this purpose. However, you still might be able to exempt your money from inheritance tax in some cases, such as trusts for someone who is disabled or certain trusts for your children. To make sense of the complicated rules and restrictions, you should talk to someone who specializes in these types of trusts.

Give it Away

One of the simplest ways of protecting your assets from inheritance tax is by giving your estate away in the form of gifts. Any money that you give to your benefactors is exempt from inheritance tax as long as you continue living for more than 7 years after giving the gift. You will also be able to give away £3,000 per year of your assets, and this will be exempted from your inheritance tax threshold. This concession allows parents and grandparents to give money to their children without fear of exceeding the inheritance tax threshold down the line.

These are just a few ways that you can deal with the inheritance tax threshold and make sure that more of your worldly possessions get passed along to your loved ones.

Simon Grant produced this content on behalf of Access Legal solicitors, whose site has pkenty of advice on the subject of making a will.

Do I Really Need to Hire a Tax Consultant?

Tax Act

If you ever start your own part time business, keeping track of your finances is one of the needed keys to a successful business. In addition, learning how to read the tax laws is important as it allows you to keep your hard earned money. However, since the tax laws change frequently, it’s a good idea to hire your own professional tax consultant. It saves you on hassle and if you find a good one, they will do their job better than you ever could. So if you want your business to run smoothly, learn how to find a tax consultant.

First, ask your friends and family if they know someone suited for the job. A tax adviser that someone else knows is more likely to be trustworthy. If not, then it’s time to pick up the phone book and start interviewing everyone. Keep in mind that some people only want your money and aren’t necessary good for your business. Avoid these scammers. If you are interviewing a potential adviser and they demand to be paid for being interviewed, they are a bad fit, drop them fast. Be sure to interview several people before deciding on who to go with. Also, even if you hire someone that sounds good, there is a small chance that it may not work out. If it doesn’t, simply fire them and try again.

You may not need to hire a tax consultant if you are determined to do your own taxes. However, unless you plan to study up on all of the laws, you may make a mistake somewhere. Some people don’t want to get a tax consultant because it costs money, but the resources they save you are worth more than you are paying them. A good tax consultant will be able to save your business money in places that you may not have figured out yourself. Of course, a bad consultant can do the same thing, but they won’t follow the tax laws correctly, leading to trouble down the line. Before you choose a tax specialist, weigh the pros and cons first.

Interhitance Advance and your Taxes

Tax Act

Nothing feels worse than when a loved relative passes away, especially when you have money problems during that time. Even thought you’re getting a nice chunk of money, there are tax issues that you’ll have to work out and put money away to prepare. The best thing that you can do to ease the burden during this difficult time is to get an inheritance advance. Unlike bank loans, an inheritance advance gives you all the money you need, with no waiting on a bank to approve your request. In order to qualify for a bank loan you have to spend days waiting on people to look over your credit, financial and work history, prior loans, and a hundred other things before they can even think about lending you the money that you need. But an inheritance advance company only needs proof that you are going to receive an inheritance; and they can get you that money quickly and efficiently.

Inheritance Advance and Loans Will Create Tax Issues

The worst part about having to take out a loan is that huge cloud of debt over your head. It seems that banks are just out there to take advantage of us at every turn. You are going through some rough times; why can’t they take it easy on you and give you a loan with some decent terms? An advance on your inheritance makes all of these questions go away. You get the money you need up front; there are no monthly payments, and when the inheritance finally comes through; the money goes to the company who gave you the advance. It’s so simple!

You have options when it comes to getting your inheritance money when you need it. A bank will tell you that a loan is more secure and that the agreement protects you as well as them. Do not go with a bank. You want your money without the complications from a loan. An advance will get you what you need when you need it.

Don’t Get your Refund Early

Tax Act

With tax season coming up, many people are already planning how they will spend their tax refund. In order to get more people coming through their doors, accounting companies are promising to give you the expected refund on a secured credit card as soon as your taxes are filed. In these hard times this is a tempting offer. After all, who couldn’t use a little extra money during these economic times? Although you may be tempted by these claims, there are a number of reasons why you shouldn’t be depending on this type of refund anticipation loan to pay off your bills.

By using this refund anticipation loan instead of simply waiting for your refund check to be mailed to you, you are looking at losing money over the long term. The amount of fees that come with using this “Emerald Card” are staggering. Unless you are in significant need of your tax refund right away, there is a lot of benefits to simply waiting a little bit longer to receive your money. Unless you are about to file for a Minneapolis bankruptcy and are advised to take this type of loan by a Minnesota bankruptcy lawyer, you should consider the number of fees that are included with this type of loan.

There are a number of fees associated with using an Emerald Card to collect a refund anticipation loan. Each time you want to use your Emerald Card at the ATM there is a $1.50 fee that will come out of your tax refund anticipation loan. You may think that you can get around this fee by simply walking into your bank and talking to the teller. However this does not work either as there is a 1.5% fee on any withdrawals that are taken out. These are only a smattering of the fees that come with accepting a refund anticipation loan. Although it may be necessary for some who are truly desperate for the money, in the majority of scenarios it is a much better idea to simply wait a few extra weeks and allow the government to mail you a check for your refund.