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In 2008 - around the time our economy went into a tailspin - anyone watching TV, surfing the Net, or listening to radio online or over the air began to hear the words "structured settlement."

We'll define the term in a moment, but first, a question:

When opera singers aren't on stage, singing opera, how do they earn a living? The answer? Performing in J.G. Wentworth commercials as Vikings or operatic bus passengers, urging anyone who "has a structured settlement, but needs cash now," to "Call J.G. Wentworth - 877-CASH NOW!"

"It's your money, use it when you need it!" we hear from trustworthy, white-haired "Mr. Wentworth" at the end of each commercial. The tone of his voice - his inflection - seems to be saying, "How dare they prevent you from spending your money. We'll get it for you."

And a big chunk of your money is for J.G., which no one is singing about.

The creativity and technical excellence that these ads reveal have led to advertising industry awards in the categories of Best Humor and Best TV. J.G. Wentworth has an enormous YouTube following, and according to statements released by the company, "a tremendous increase in business because of the ads and timing - hitting the air throughout the recession."

While the commercials are cute, there's nothing funny about cashing in a personal injury structured settlement, and doing so, in the opinion of Hanford attorney Richard Conway, "could easily be one of the worst financial decisions imaginable."

Lump sum settlements are often

quickly spent

Studies conducted by highly credible research organizations consistently show that 25 to 30 percent of all lump-sum cash awards in personal injury cases have been spent within two months and more than 90 percent is gone within five years.

"For someone without experience in managing significant amounts of money, temptation to spend or loan foolishly is everywhere," Conway observes. "Only, at the time, to that person, it won't seem to be foolish, especially if reasoning is impaired, due to the injury itself or judgment has been affected because of pain medication."

But there is no reason that should ever happen, as we can prevent loss of the settlement money, and at the same time, secure both a stable financial present and future.

We do this by placing most of the settlement funds into a structured settlement annuity.

A tremendously valuable financial tool

"In a typical, court-approved structured settlement, the accident victim might receive some money up front - perhaps for the payment of medical bills, ongoing living expenses, nursing care and so on. The balance will purchase an annuity from a highly rated life insurance company," the Hanford attorney explained.

"One of the most valuable things about a structured settlement is tax free growth, and for children - with years before large payments are to be made - this is terrific. But, if you just put the entire amount in a bank, interest earned is taxable, and the benefit far less," Conway underscores.

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"One of our clients lost his hand in a horrible accident at his uncle's hardware store when he was 5 years old. We negotiated a large sum of money for him, which went into a structure about 15 years ago. Turning 18, he received about $2,200 a month, plus annual payments of $12,000. Every four years there are anniversary payments - for example, at age 18, it was $100,000 to pay for college and then 22, $125,000, at 26 it will be $150,000, every four years, similar amounts.

"But he is not lazy and has a regular job, is married and they have a child. It was the wisdom of his family listening to sound advice which assured this young man a secure financial future.

"But I have seen clients, over my advice, take a large sum of money to resolve a case instead of a structured settlement. With one client, $250,000 was turned into zero in less than three years, with my client blaming everyone else but himself."

So, what is the J.G. Wentworth Connection?

Let's say you have a structured settlement annuity thta will pay $1 million over 20 years, but you want all of that money now, to start a business, for some medical reason or because you want to do some serious traveling. Here is where our friends at J.G. Wentworth and similar companies will be tickled pink to help. They will buy your settlement.

But at what cost? How much will you lose?

"Lose?" you might be thinking. "Why should I lose anything at all? Sure, I know there will be some charge for their services, but that can't be too much, can it?"

The answer next time.

Dennis Beaver practices law in Bakersfield and welcomes comments and questions from readers, which may be faxed to him at (661) 323-7993 or e-mailed to him at Lagombeaver@hotmail.com.

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