Now claimants can receive tax-free payments based on a combination of returns from a Vanguard balanced equity fund and a traditional fixed income annuity. While fixed income annuities provided guaranteed, tax-free payments and spending discipline, many claimants and their attorneys want some of their settlement dollars to be placed into potentially higher yielding stock investments. Assura Trust’s new Growth Structured Settlement product (”GSS”) offered through Settlement Advisors meets this need.
- 50% of structured amount placed into a traditional fixed annuity
- 50% of structured amount placed in GSS product
- GSS funds are invested in Vanguard’s LifeStrategy Growth Fund
- Vanguard’s fund is invested 80% in stocks and 20% in bonds
- Periodic payments from the traditional structured settlement annuity are determined at the time of settlement
- Periodic payments from the GSS product are based on the market value of claimant’s GSS fund balance and the years of payments remaining
- Minimum size – $100,000; Minimum term – 20 years
- Potentially higher returns from settlement dollars offered by equity investments
- Tax-free future payments from Growth Structured Settlement
- Same future spending discipline as provided from traditional structured settlement
- Growth Structured Settlement eliminates one of the main obstacles to settling with a structure: “Current Interest Rates are too low”
In some cases where more risk can be tolerated Settlement Plus can be used to increase the equity portion of the settlement funds. In contrast to Assura’s GSS where the equities are limited to under 50%, the equity component using a Settlement Plus can be higher, and, if selected, the funds can be actively managed by a personal investment manager. While ths product has the potential to provide higher returns, the risk of lower or negative returns is increased. Settlement Plus should be used where the claimant understands and can tolerate the additional risk involved.
