Recently, I had the opportunity to work with a couple during the settlement of their lawsuit involving the loss of their young child.
Initially, all parties thought the settlement was too small for a structured annuity. Yet, after I met with the couple and discussed their financial needs, it became apparent that an annuity could be beneficial. One of their desires was to own a home. Not an easy task in Southern California. Their credit was average at best and the settlement was not enough to pay cash for a home.
I suggested the couple consider an FHA loan that required only a 3.5% down payment. Our staff was able to fashion an annuity for them that would make their house payment each month along with PMI. We worked with FHA/HUD personnel, explaining the annuity payment process, so the couple would be approved for an FHA loan.
Guaranteed Home Loan Payments with a Settlement Annuity
With the settlement annuity in place, the couple won’t have to worry about coming up with the cash for the monthly mortgage payment or the property tax payment twice a year. They will use tax-free money to make their mortgage and be able to deduct the mortgage interest from their tax return. Since the monthly annuity payments are guaranteed, they will never have to be concerned about losing the home if one of them were unable to work or passed away prematurely.
Celebrating Their Son
In addition, we used a small amount of their settlement to establish an annual payment to the local library in the name of their deceased son. The library was one of his favorite places.
While the couple’s settlement was not large, they realized that through a structured annuity they could fulfill their dream of home ownership while celebrating their son through their annual gift to their library.
Feel free to give me a call discuss how a settlement annuity could help address your clients’ financial needs.