Risks Involved in Annuity Transfers
Many of us today look forward to convert a fixed amount of monthly payment or annuity payments into a considerable sum of money and use this to get rid of existing debts or some sort of financial shortcomings. Although this may seem a very attractive thing to do, it is not advisable.
Some countries such as the United States of America encourage long term payments by law. Most of the countries have legalized paying out lottery winnings in a single disbursal of lump sum amount. However, most of the lottery winners fail to retain the money and lose them as soon as they earn it.
This is because of the following reasons:
People who are not used to owning lump sum amounts of money are particularly aware of how to manage it. They fail to invest the money wisely and end up spending in unwanted stuff carelessly.
Ordinary people choose high risk investments while investing the overwhelming amounts of money earned through luck such as winning a lottery. They ignore the safety and security offered by low-yielding investments such as fixed deposits or mixed portfolios thereby losing all the money that they earned within months.
Such people become over-generous and start to give out money to relatives and friends in need, buying their children property or giving away money for small businesses, yield to materialistic interests of their kith and kin such as buying expensive cars, homes, etc.
They turn to business friends for advice and on their behest invest in diversified businesses that seem very profitable upfront but turn out to be utter failures in no time.
Driven by greed and want of more money within a short span of time, these people spend in betting, casinos, horse races, etc and waste their money in more ill ways than one.
Apart from the above self-inflicted ways of ruining the money earned, there are also cases of extortion from underworld, relatives becoming greedy and apply emotional pressure to extract more cash, etc also happens in some cases.
Hence, owing to the above cited circumstances it is always advisable not to prefer one-time lump sum amount of money against a structured form of period and regular settlement scheme in the offing. This is more applicable especially when the person who has won the lottery or sweepstake is a disabled or a handicapped person. Availing for the structured form of settlement would ensure enough finances to fund the treatment of the person's disability or handicap.
If you want, you can download Living Trust Forms for your own living trust writing in order to save money on taxes or set up long term property management plan.
Some countries such as the United States of America encourage long term payments by law. Most of the countries have legalized paying out lottery winnings in a single disbursal of lump sum amount. However, most of the lottery winners fail to retain the money and lose them as soon as they earn it.
This is because of the following reasons:
People who are not used to owning lump sum amounts of money are particularly aware of how to manage it. They fail to invest the money wisely and end up spending in unwanted stuff carelessly.
Ordinary people choose high risk investments while investing the overwhelming amounts of money earned through luck such as winning a lottery. They ignore the safety and security offered by low-yielding investments such as fixed deposits or mixed portfolios thereby losing all the money that they earned within months.
Such people become over-generous and start to give out money to relatives and friends in need, buying their children property or giving away money for small businesses, yield to materialistic interests of their kith and kin such as buying expensive cars, homes, etc.
They turn to business friends for advice and on their behest invest in diversified businesses that seem very profitable upfront but turn out to be utter failures in no time.
Driven by greed and want of more money within a short span of time, these people spend in betting, casinos, horse races, etc and waste their money in more ill ways than one.
Apart from the above self-inflicted ways of ruining the money earned, there are also cases of extortion from underworld, relatives becoming greedy and apply emotional pressure to extract more cash, etc also happens in some cases.
Hence, owing to the above cited circumstances it is always advisable not to prefer one-time lump sum amount of money against a structured form of period and regular settlement scheme in the offing. This is more applicable especially when the person who has won the lottery or sweepstake is a disabled or a handicapped person. Availing for the structured form of settlement would ensure enough finances to fund the treatment of the person's disability or handicap.
If you want, you can download Living Trust Forms for your own living trust writing in order to save money on taxes or set up long term property management plan.