FAQ: Investing in Litigation Finance and Structured Settlements with a Self-Directed IRA

What are the two alternative legal sector investments discussed for self-directed IRAs?

The two alternative investments are litigation financing, where investors provide non-recourse cash advances for legal cases, and structured settlements, where investors purchase rights to future settlement payments at a discount.

How does litigation financing work with a self-directed IRA?

The IRA owner provides a non-recourse cash advance to fund legal cases in exchange for a portion of the final settlement, with returns only occurring if the case is successful.

What are the risk and return characteristics of litigation financing?

Litigation financing carries relatively high risk since investors only make money if the case is successful, but it offers potential for high returns based on a percentage of damages or a multiple of the initial investment.

How can investors participate in litigation financing?

Investors can participate through a funding group, online platform, or hedge fund that specializes in litigation financing, either in single cases or portfolios of legal cases.

How do structured settlement investments work in a self-directed IRA?

Investors purchase the rights to future structured settlement payments at a discounted lump sum amount, then receive steady passive income according to the original payment schedule, with income greater than the investment amount.

What is the risk level for structured settlement investments?

Structured settlement investments involve little risk and provide steady passive income since payments continue according to the original court-established schedule.

What is the key difference between litigation financing and structured settlement investments?

Litigation financing is higher risk with potential for high returns but only pays if cases are successful, while structured settlements offer lower risk with steady, predictable income streams.

Who is Next Generation Trust Company and what services do they provide?

Next Generation Trust Company is a custodian of self-directed retirement plans that provides comprehensive account administration, transaction support, and guidance on investing in alternative assets through self-directed plans.

Where can I find more information about these investment options?

More information is available at www.NextGenerationTrust.com, including the full blog article about investing in litigation finance and structured settlements with a self-directed IRA.