Page 2 Your Newspaper April 2009SmallThis column is produced by the Financial Planning Association andprovided by Al Procaccino, a member of FPA and Certified FinancialPlanner with Castle Financial.www.castlefinancial.comBig Windfalls and Structured Settlements – What they are,and how to handle themIf you’ve received a windfall, it might sound like you’refixed for life. The reality is that your financial life haschanged drastically, and you need to plan for it.A structured settlement is a way of receiving partialpayments for a major amount of money you’ve won orreceived in a lottery, a court or insurance case. You heara lot of commercials on the air for getting cash fromstructured settlements, but it’s important to understandwhat they are and how they should be handled if you’reever the recipient.A good place to start is with a tax expert like a certifiedpublic accountant, a financial planning expert like aCERTIFIED FINANCIAL PLANNER professional,or an attorney or structured settlement consultant whohas significant experience dealing with these paymentstructures. When there is big money at stake, it mightmake sense to consult all three. Some ideas:First, the definition: A structured settlement is structuredlike an annuity. It is a contract written by an insurancecompany that provides periodic payments toa winner in a lottery, a lawsuit or some other settlementarrangement over time. Amounts can be paid outweekly, monthly or yearly.The benefits: Structured correctly – and with the rightoversight going in – a structured settlement annuityprovides a payment stream that may be tax-free over aperiod of time during the winner’s lifetime and remainingpayments may be bequeathed to his or her survivorsafter their death.The pitfalls: One should never accept a structured settlementagreement without vetting it against their own1851 Bowler DrivePICKERING, ON L1V 3E5Sunshine Publishing produces monthly publicationsfeaturing family-value articles on a wide variety oftopics. It is independently owned and operated andis not affiliated with any real estate association,board or company.Opinions expressed are those of the writers andnot necessarily those of the Publisher or advertisers.The Publisher regrets any inaccuracies containedherein, but accepts no liability for damagesarising out of errors in advertisements beyond theamount paid for the space actually occupied by theCall or Fax Toll Free: 1-800-330-5709E-mail: rc@homesnewspaper.comVisit Our Websites: www.Sunshine-Publishing.comwww.SunshinePublishing.cawww.HomesNewspaper.comtax situation or estate needs. Also, it helps to have anexpert who understands whether certain fees or chargesconnected with that settlement are appropriate to theoverall size of the award. Keep it in mind that the structuredsettlement must be purchased by the person orcompany that is at fault or is making the award. This iswhy it’s particularly important to have an expert watchingover that selection process from the moment theaward is announced.The lump sum alternative: If a winner chooses a lumpsum payment over a periodic payment based on the fullamount of the award, that payment will likely be handledwith an insurance contract that physically pays thelump sum but at a much heftier chunk of the full total– they get a big payoff for giving you a big one-timepayoff. Keep in mind that the lump-sum payoff ideamay not be worth pursuing unless it’s large enough tothrow off substantial investment income in the futureand that you have talented management making surethat lump sum makes money over time. This is why it’salways a good reason to confer with tax, financial andinvestment experts on the best way to go with eithera lump sum or a periodic payment from the momentyou’ve been informed you won the money.Keep in mind that others get an advantage too:Many attorneys are also structuring their fees that aretaken directly out of a court award. This allows themto postpone receiving their share of an award on a taxdeferredbasis so they can build their own retirementfunds. There’s nothing wrong with this, but it’s importantto know who else in the process might benefit fromany decisions that get made.One Townline CircleROCHESTER, NY 14623advertisement in which the error occurred, whethersuch error is due to the negligence of its servantsor otherwise and there shall be no liability for noninsertionof any advertisement beyond the amountpaid for such advertisement space. Errors must bebrought to the newspaper immediately and beforeany subsequent insertion of the advertisement.The publisher will not be responsible for errorsafter the first publication of any advertisement. Wereserve the right to restrict all ads to their properclassifications and to edit or reject any copy.WIN $50Call 1-800-330-5709 x229WhoSaid This?The third caller withthe correct answerwill win $25When I was younger and dida stand-up gig, it would takeme two weeks to recover.Sometimes I’d get sopanicked that I would stutter.The fifth caller withthe correct answerwill win $25I like long walks,especially when theyare taken by peoplewho annoy me.How to find business successin challenging times(NC)-Most business owners will tell you it’s not alwaysnecessary to grow to be successful - it’s oftena matter of getting the most out of what you’ve got.But many business owners work so hard in the businessthat they neglect to find time to work on thebusiness.That seems especially true when times are good andcustomers are coming in the door.But when the economic weather changes, weak orineffectual policies, practices and controls start tostand out. Unaddressed, they can severely hinderbusiness success.“A challenging economic environment calls for agood, hard look at your operations,” says StephenAikman, national manager, Retail Clients at RBC.“In fact, periods of relative economic weakness createopportunity for strong retailers to gain marketshare through business re-investment and efficiencyimprovements.”Aikman offers these tips to stay buoyant in toughtimes:Review your budget and plan for different scenarios- It’s good practice, particularly in uncertainclimates, to have three scenarios mapped out in yourbudgeting process - an ideal scenario, one that’s reasonable,and a worst case situation.Review cash flow projections - Since you’re likelyusing your budget to predict cash flow and cashneeds, use three-month cash flow projections, whichare more realistic than one-year forecasts.Monitor your finances and know your businessdanger signs - Keep a close eye on your financials -watch for warning signs like low cash flow reserves,increasing expenses, delayed payables, taxes in arrears,and decreasing sales.Protect your business - Some ideas include: activelymanage your relationships with suppliers, serviceproviders and lenders by communicating with themregularly; secure related-party debt; limit personalguarantees for borrowings and land leases; and coverthe repayment obligation if you have a line of creditor a term loan with a matching life insurance policy.