Exclusive Inventory of DCF Income Payments
Call or email to request a custom split or to hold a payment stream off-market for 48 hours. Payments marked Exclusive are only available to our subscribers.
Download illustrations, payment schedules and reservation forms in the “Downloads” button next to each case. Click Here for inventory PDF
Are you a financial advisor? Visit DCF Exchange for appointment information.
Summary of DCF Income Payments:
- DCF Income Payments are existing and in-force payment streams backed by annuities, available at a discounted price & higher yield than comparable fixed term annuities.
- Purchasers acquire the right to receive these future payments in a court ordered and state- regulated transfer procedure.
- DCF payments offer a higher yield and lower price because sellers need cash today, and they sell their rights to future payments at a discount.
- Fixed Term DCF payments will pay exactly as scheduled to the purchaser or their heirs. Insured DCF Income Payments offer a fixed yield but may pay out earlier than expected via life insurance on the seller.
- DCF payments have no volatility, no market exposure, no fluctuation in value, and no complicated terms or contracts.
How To Choose:
- In Stock cases are fully approved, ready for immediate resale
- In Review cases are court approved and in DCF’s legal review process. Buyers can expect to close within 1-2 weeks
- In Pipeline cases are in an earlier stage of the transfer approval process. Buyers can expect to close in 15 to 45 days.
- Insured cases are insured with life insurance. If the seller dies before the end of the assigned payments, life insurance repays any principal and interest due to the purchaser under the assignment agreement as of the date of the seller’s death.
- Inventory is priced as of a projected close date- the final price will change slightly based on actual close date.
- Cash or IRA funds are accepted- Use GoldStar Trust as the self directed IRA custodian to purchase with qualified funds
- Cases can be split to suit individual needs, see “Split Cases” tab on this page and call for details.
How to Buy:
- Hold a case for 48 Hours to take it ‘Off-Market’
- Reserve a case by sending in a purchase order with purchaser details (name/address etc)
- If using qualified funds, open a Self Directed IRA with GoldStar and rollover/ transfer sufficient funds.
- Closing book is sent by DocuSign for review and electronic signature. For IRA’s, the purchaser signs a Direction of Investment included in the closing book to complete the purchase.
- Closing book contains the contractual assignments from seller, to intermediary, and then to purchaser, along with the final court order, carrier stipulation agreement or acknowledgment letter, amortization schedule, and payment servicing agreement.
Closing and Funding Process:
- No pre-purchase buyer deposits are required.
- Transactions are funded only after the purchaser has received and reviewed the complete closing book.
- Once purchaser reviews and e-signs the Absolute Assignment of Cash Flow and Payment Servicing Agreement, the purchase price is sent to the dedicated escrow account, and the case is closed.
- Closings are safe, quick, and efficient through the use of a dedicated, third-party escrow account and electronic signatures.
Receiving Income and Cash Flows:
- Income payments are received into a payment servicing account specific to each case and under the sole control of the purchaser.
- The payment servicer is GoldStar Trust Company, a federally regulated bank and trust company based in Texas.
- GoldStar receives payment from carrier and sends payments by ACH or check on to the purchaser, their IRA if applicable, or to their heirs or assigns.
- Payment servicing allows for easy beneficiary designation, anonymity, and transferability to purchaser’s heirs, assigns, or estate.
Heirs, Beneficiaries, and Liquidity Provisions
- The payments will pay as scheduled to the purchaser or to their heirs
- Beneficiaries may be designated directly with the Payment Servicer
- Payments may be re-assigned or sold to another buyer
- DCF may offer to re-acquire payments from Purchasers on a case by case basis and at a market price determined at the time of resale.
- There is no partial or full cash surrender schedule.
Structured settlement payments are typically received tax free by the original annuitant, per 26 U.S. Code § 104. Therefore, carriers do not issue IRS Forms 1099 to the original payees.
U.S. Code § 5891 and IRS audit guidelines outline how a new assignee may obtain an existing payment stream from an original payee without incurring an excise tax – most importantly, a qualified court must determine that the purchase is in the original annuitant’s “best interests.”
This is the path followed by DCF Exchange on all transfers of structured settlement payments and is documented in our closing book. A “DCF Income Stream” is the right to receive a customized schedule of structured settlement payments, each a “DCF Income Payment.”
While the sale proceeds are not taxable for the original payee, the portion of a DCF Income Payment that is income (vs principal) is subject to tax for the purchaser. Carriers do not issue IRS Forms 1099 to the purchaser, but the taxable income portion of each payment is the taxpayer’s responsibility.
Income from assigned payment streams are typically considered ordinary income and recognized for tax purposes only when it is received, leaving unrealized income to defer, accrue, and compound.
The portion of a payment that is reportable as income (and not principal) is ultimately determined by the taxpayer. However, DCF Exchange obtained guidance confirming favorable deferral treatment of DCF Income Payments from a well-recognized nationwide accounting firm, which we make available to our clients. This guidance states that the income portion of a payment is (1) the amount received minus (2) the price of purchase for that payment. That allows for substantial deferral as early payments have proportionally less taxable income, and later payments have more.
DCF Exchange performs the calculations following this reporting method and displays the taxable portion of each DCF Income Payment on the Payments Schedule.
Some purchasers choose to compute taxes based on an “exclusion ratio” applied to the whole payment stream so as to obtain a consistent ratio of income vs. principal across all payments. For purchasers who use this less favorable tax deferral method, DCF computes the exclusion ratio on the Payments Schedule. While DCF has not obtained tax advice regarding this method, we understand that many purchasers of structured settlement payments use this method of tax reporting.
Taxation In IRAs:
Please note, if a DCF Income Payment is owned by your IRA then the tax treatment above does not apply, as IRA distributions trigger taxes for IRA holders, not the income from IRA owned assets.
DCF Exchange, LLC does not offer tax advice, and this page is for general information only, so please be sure to consult your own tax adviser for more information.
We are able to easily accommodate splits or portions of cases.
Lump Sum Splits
Lump sum cases may be split to suit the purchaser. For example, one lump sum of $250,000 on 1/1/2030 may be split for a purchaser who only wants to purchase $150,000 of that future payment, or split to fit an available investment amount, such as the balance of an IRA or a specific desired purchase price.
Income streams may also be split or tailored to suit your needs. For example, 240 monthly payments of $1000 may be split into 240 payments of $500 to one customer and $500 to another customer.
We can also accommodate a split such that a buyer takes the first 120 payments of $1000, and another buyer takes the deferred 120 payments of $1000. This is especially useful where a buyer purchases a portion of a case with an IRA and buys the other portion with non qualified funds.
Not all splits can be accommodated, so please call or email to inquire about a split to suit your needs.
All the DCF Income Payments we sell utilize a professional servicing company to handle the payment stream. This is a policy used by the leaders of the industry, and follows precisely the procedures used by institutional clients and securitization portfolios of structured settlement payments. We have adopted the same procedures as a matter of good business policy. This page details how payment servicing works with DCF Income Payments.
WHAT ARE THE BENEFITS OF PAYMENT SERVICING?
Payment servicing is common in banking, credit card processing, securities, mortgage servicing, property management, IRA administration, investment management, consumer finance, auto finance… in short, nearly every transaction in the financial landscape involves a form of payment servicing.
The benefits of payment servicing are as follows:
- Easy account administration for address & bank account changes
- Easy administration for heirs/successors/beneficiaries of payments
- Human interface for account issues
- ACH transfers and direct deposit–incredibly, many insurance carriers will NOT accommodate ACH deposits!
- Easy transferability of payments to new owners, beneficiaries, or heirs.
One of the key benefits of servicing is the last mentioned: transferability. It is a simple process for a purchaser to re-transfer a payment stream that is properly serviced. No involvement from the seller, factor, or agent is required; since the purchaser holds all rights to the cash flow, they simply notify the servicer of a transfer.
OUR PREFERRED PAYMENT SERVICER:
We have entered into a long term relationship with GoldStar Trust Company to perform payment servicing, account management, and policy service for our agents and clients. GoldStar is the trust only branch of a $4B (assets) bank and is a market leader in self directed IRA administration as well. Their regulatory and compliance structure and market leading position in IRA and bond administration makes them a trusted and stable partner in our process.
GoldStar’s servicing platform ensures you always have a human interface to deal with any changes in your circumstances such as changing address or switching bank accounts. Whatever your needs, GoldStar will handle them directly with the carrier and you. The setup costs for this service are paid by the DCF Exchange and your payment servicing agreement is included in each case Closing Book.
WHO IS GOLDSTAR?
GoldStar Trust Company is the trust-only branch of a $4B Texas bank. The Trust company is one of the nation’s leading Self-Directed IRA custodians and is known for its fantastic customer service and attention to detail. GoldStar serves as Paying Agent and Trustee for issuers of Church Bonds and Municipal Bonds in 38 states, and handles over 30,000 customer IRA accounts. As a regulated custodian for billions of dollars of client assets, their expansion into payment servicing for DCF Income Payments is a natural extension of their capabilities.
PAYMENT SERVICING FEE SCHEDULE:
- Set Up Fees, paid by us
- Periodic Fees, deducted from each payment received
- $5 per distribution for monthly payment accounts
- $25 per lump sum payment, deducted when the distribution is made
Considering the benefits, the payment servicing fees are nominal, and far less than IRA or other custodian service providers. When you consider the liquidity options alone, servicing is a bargain!
PAYMENT SERVICING SUMMARY:
Payment servicing offers benefits of liquidity, anonymity, and flexibility. Reassigning, gifting, or direct depositing a DCF payment stream can be difficult without a servicing arrangement. Utilizing the best in class servicer, we offer you this additional flexibility on every case.
- Load an available cash flow by selecting the case code from the drop-down menu & click Solve.
- To adjust closing date, enter the new date in the “starting” investment field, and click Solve.
- Click ‘Schedule’ to see amortization, and click ‘PDF’ to download. Note, some browsers may block PDF popup.
Understand Rates on DCF Income Payments
A DCF Income Payment investment price is the Present Value cost of the specific Future Value payments shown, at the Discount Rate shown, and Priced On the date shown.
The Basics of Time Value of Money
The basic premise is that a dollar today is worth more than a dollar tomorrow. How much more? Well that depends on your discount rate. Thus, there are three key terms to understand the concept of “Time Value of Money” and of discounted cash flow (DCF) math.
Future Value- FV is one or more payments, at specific dates in the future. With DCF Income Payments, it’s the specific payment description, for example, “120 monthly payments of $1000 starting on 1/1/2020 until 12/1/2029” or “One lump sum of $100,000 on 12/1/2030” This is the Future Value(s) you receive
Discount Rate- this is the rate at which a Future Value decays, or is discounted. in the most basic sense, $100 one year from now is worth $95 today, at a 5% discount rate. For our purposes with DCF Income Payments, the Discount Rate, is the same as the Effective Rate, and is also the same as the Internal Rate of Return, or the Annual Percentage Yield. This rate is clearly shown on the inventory page.
Present Value- PV is the value today (or on a specific date) of the specific Future Value(s) of the payment stream, discounted to that purchase date at the Discount Rate shown. In our case, Present Value is also the Purchase Price or investment cost, and the day we use to calculate that PV is the ‘Priced On’ date shown on the inventory.
Every Future Value needs to be discounted using the Discount Rate, back to today, using the compounding period specified, to arrive at today’s Present Value for that specific payment.
Thus, every piece of information you need to verify the mathematics is shown on our inventory page, and so…
A DCF Income Payment investment price is the Present Value cost of the specific Future Value payments shown, at the Discount Rate shown, and Priced On the date shown.
There’s no mystery to it at all, but unfortunately, people accustomed to complex annuities with hidden fees and charges just don’t believe that what you see is, in fact, what you get.
All this can be verified using a good discounted cash flow annuity calculator. Use ours above or use MS Excel and XIRR the XIRR or XNPV functions
WHO ELSE BENEFITS FROM ANNUITIES?
“I have worked with DCF a little over 2 years and have found Nathaniel and Ross the most knowledgeable owners I’ve worked with. In addition, their products are exceptional as I have sold them in IRAs, personal retirement, for Grandchildren, for college expenses and replacements for low yielding CD’s. I will continue to offer them to all clients that need a guaranteed Fixed Rate from Major Insurance Carriers.”
“I have purchased a few payment streams and am in the process of purchasing another one today. Nathaniel and his staff are great to work with. The transactions have been easy to finalize and the monthly payments have all been received on time, as expected. I have purchased payment streams from 3 other companies and, working with DCF is, by far, the best experience. Nathaniel and his staff really care about providing good customer service. They are responsive and work to earn your business. I have been very happy with my experience with DCF Exchange.”
“For years I have tried to wisely invest in/for our retirement. With the disastrous state of the economy in recent years, this had become a real challenge. I sat at the computer and researched how to make an investment/income stream that would be safe, reliable and not make us a burden on our children in our older years. I came upon SMAs…
Nathaniel was extremely helpful and accessible, with all my questions and concerns. He guided me every step of the way: all the while, I felt he had my back. I have done numerous deals with him, and have been very satisfied every time.
I believe I have found the answers for a major part of my future income. Nathaniel insists on an independent, 3rd party lawyer, to review all his cases, and HE pays for it. That to me is reason enough to take all my annuity business with him. Much Thanks and a job well done.”
“I enjoyed working with you. Whenever possible, I’ll try to work with you for fixed streams of income. Thanks again for locating a good contract and shepherding us through.
Appreciate all your efforts!”
“Than, Thanks for locating a good contract and shepherding us through.”
“You are not only good and honest professionals, but also admirable as we share the same goals. As you know, in this business it’s hard to find honest participants and you gentleman are a breath of fresh air.”
“Thank you! I enjoy working with you and appreciate all your efforts as well. Whenever possible I’ll always try to work with you for fixed streams of income.”
“My sister is in Ireland as we speak and enjoying the security of the deals you provided. Thanks again.”
“DCF performed far above and beyond my expectations from beginning through the end closing process and beyond. When there seemed to be an issue with the trustee, DCF stepped in and cleared up all misunderstandings and insured everything was correct. I should note that the misunderstandings were really on my part and, once I was finally clear, I now fully understand and agree. Thank you DCF.”