What is the role of Hub Business Trust?

The Hub Business Trust is the entity named in our transfer process. SMA Hub at no time holds the right to receive the cash flows from our inventory. As the court order approving the transfer is a matter of public record, utilizing the trust provides an important layer of confidentiality for your client.

When the “irrevocable assignment of cash flows” is executed by SMA Hub, as trustee of Hub Business Trust, and your client, Hub Business Trust no longer has any right or title to the payments. At that point, the cash flows are irrevocably assigned to your client. The servicing agreement directs how the payments are made.

At what point does your client take possession of the SMA?

The Hub Business Trust is the named buyer of the cash flows and commits its capital to buy each case that SMA Hub offers for sale. Therefore, it is not just prudent but imperative that SMA Hub, as trustee of Hub Business Trust, performs a rigorous review of each case prior to any purchase.

The payment streams are only available to your client after they have been meticulously reviewed and the insurance carrier has acknowledged the transfer. Your client’s funds are not committed at any time prior.

Once the due diligence process is complete, Hub Business Trust executes an agreement to irrevocably assign the cash flows to your client.

At that time, your client takes ownership of the cash flows.

Who conducts the legal review?

SMA Hub’s internal legal department reviews all of the supporting documentation to ensure the cash flow is conveyed to the purchaser absolutely and irrevocably. The review includes a thorough examination of the court order and supporting court documents, verification that the cash flow is free of any liens and attachments, and review of the transfer and assignment documents.

Should I hire an outside attorney?

Though not required in our process, you are welcome to hire your own counsel to provide an independent review of the supporting materials. Our legal department can help familiarize your attorney with the asset class and answer any questions he or she might have.

Is it preferable to be named directly in the court order?

No, there are a number of disadvantages to being named in the court order. Court orders are public records and your personal details and those of your purchase will be visible to all.

Also, the court order does not transfer title or guarantee payments to the purchaser. The court has a duty only to verify that the sale of the payments is in the best interest of the seller– they have no duty, and take no action, to verify if the payments are in fact valid or if there are any claims to the payments. This verification is done outside of court, and title is transferred by contract.

A distinction should be made between the court process and the contractual assignment in the secondary market for structured settlements. Federal and state law requires that a court approve any transfer of a structured settlement. But the court order alone is not sufficient to convey title. The end purchaser’s right to receive payments is actually conveyed by a contract between the seller and the end purchaser. In some cases, the seller is the original annuitant. But in many cases, the seller is an entity acting as an intermediary. In either case, it is the contractual agreement between the seller and buyer that conveys title.

When do I transfer funds?

Only after the payment stream is fully vetted and completely transferred to the Hub Business Trust do we ask for funds. At funding, a purchaser executes a single document that irrevocably assigns the payments from the Trust to the purchaser.

With In Stock cases, funding can move as quickly as 48 hours. With Pre-Order cases, the date of funding depends on the case; our anticipated close date is indicated on each case.

In either case, funds must be transferred to the Hub Business Trust within two business days after you receive the closing book. The case can close immediately upon mutual execution of the irrevocable assignment of cash flows, transferring full title to your client.

What’s in the Closing Book?

After SMA Hub has completed its legal review of the case, a Closing Book will be prepared and sent electronically to you, the agent. Funding is required within two days of receipt of this Closing Book. The amortization schedule showing the final purchase price will be enclosed along with wiring instructions.

The contents of the Closing Book show the complete chain of title to your client and are as follows:

    • Summary Cover Page
        • Wiring Instructions, Final Purchase Price
    • Review Checklist
        • Legal Review Letter & Specific Case Findings
    • Amortization Schedule
        • Specific Transferred Payment Stream
    • Irrevocable Assignment
        • Between Hub Business Trust and Purchaser
    • Servicing Agreement
        • How Cash Flows Are Handled
    • Acknowledgement Letter or Stipulation Agreement
        • Carrier Confirms Transfer of Payments and Court Order
    • Court Order
        • Approves Seller’s Transfer to Hub Business Trust
    • Purchase & Assignment Agreement/SMA Purchase Agreement
        • Between Factoring Company and Hub Business Trust
    • Purchase Agreement/Absolute Assignment Agreement
        • Between Original Seller and Factoring Company
  • Current Benefits Letter
    • Carrier Confirms Currently Available Payments

Why are payments serviced by GoldStar Trust Company?

Use of a servicing agent is required by some carriers and is rapidly becoming the industry standard. When coupled with our purchase process, payment servicing offers a host of benefits, including purchaser anonymity, ease of account servicing, and increased transferability.

SMA Hub has entered into a long term relationship with GoldStar Trust Company to perform payment servicing, account management, and policy service for our agents and their clients.

The Hub Business Trust establishes a payment servicing account with the GoldStar Trust Company for each cash flow that it buys. Whether it be an In-Stock case or a Pre-Order case, the servicing platform at GoldStar Trust Company ensures you always have a human interface to work with when your circumstances change. Moving and need to update your address or decide to change banks, whatever your needs, GoldStar Trust Company will handle them directly with the carrier and you. The setup costs for this service are paid by the Hub Business Trust, and a copy of the GoldStar servicing arrangement is included in each case closing book.

Who is GoldStar Trust Company?

GoldStar Trust Company began as Colonial Trust Company, incorporated on August 19th, 1989, in Phoenix, Arizona. In 2004, Colonial Trust Company was acquired by Happy State Bank of Amarillo, Texas and emerged as GoldStar Trust Company. In 2006, GoldStar Trust Company acquired American Church Trust Company in Houston, TX and later relocated all operations to Canyon, TX. Since then, GoldStar has enjoyed substantial growth due to strong executive leadership and keen financial foresight. GoldStar Trust Company is backed by the financial strength and confidence of Texas-based Happy State Bank, founded in 1908.

GoldStar Trust Company offers unique retirement solutions and investment options that allow investors to diversify their IRA portfolios with precious metals and other alternative investments. A trusted resource, GoldStar Trust Company also serves as Paying Agent and Trustee for issuers of Church Bonds and Municipal Bonds in 38 states.

GoldStar Trust Company is highly respected in the Structured Settlements market as both an IRA Custodian and as a Disbursing Agent for investor payments. From ACH processing to online access, GoldStar Trust provides unmatched customer service.

How big is GoldStar Trust Company?

GoldStar Trust Company is one of the nation’s leading Self-Directed IRA custodians with over twenty-five years of experience and $2 billion in assets.

More information can be found on the company website http://goldstartrust.com/

How safe are my payments?

You are protected by U.S. contract law. When you and Hub Business Trust execute the Irrevocable Assignment of Cash Flows, all rights and title to the payment stream are passed from the trust to you. As of that moment, Hub Business Trust has no ownership interest in the cash flows going forward. When payments start, they are sent directly from the insurance carrier to GoldStar for servicing, with no involvement from Hub Business Trust.

Subsequent actions of the Hub Business Trust or SMA Hub have no effect on the payment streams irrevocably assigned by us. They are not our property once sold, and neither we nor any creditors or parties would have any claim to the payments.

GoldStar Trust Company is the independent payment agent. It is able to receive funds from Insurance Carriers but each and every dollar is accounted for and subject to our “Irrevocable Assignment of Cash Flows.” Even though the insurance carrier sends your payments to GoldStar Trust Company, they never receive ownership of those payments.  GoldStar Trust Company is used to independently verify the amount and payee, resolve discrepancies, if any, and then send the payment to you. At no time does GoldStar Trust Company obtain legal ownership of your funds. Thus in the unlikely event that a creditor of GoldStar Trust Company ever attempted to make a claim against GoldStar, your payments would not be considered a GoldStar Trust Company asset.

In short, GoldStar Trust Company is a nationally recognized, professional payment servicing platform used broadly by companies and institutions to accurately receive payments and service policies and accounts.

Who is SMA Hub?

SMA Hub, Inc. is the leading wholesale distributor for Secondary Market Annuities.

SMA Hub was founded in 2013 by veterans of the SMA industry. The Hub is the premier advisor’s resource for exclusive In-Stock secondary market annuities. We offer certainty to advisors, quick closing and high returns for your clients.

How does SMA Hub help the advisor and their clients?

SMA Hub was created to serve advisors and process cases in a manner that protects their clients to the highest degree. By streamlining the purchase process, offering immediate availability of In-Stock inventory, utilizing a professional payment servicing provider and thoroughly reviewing each payment stream, we offer proven and vetted SMAs to our advisors and their clients.

Our purchase process is carefully designed to reduce the fallout rate associated with SMA transactions by offering exclusive In-Stock inventory. Advisors benefit by working with experienced industry veterans and their clients benefit from superior protections and guarantees.

What is unique about the process?

SMA Hub’s unique procedure serves many purposes.  First, it protects your client’s confidentiality. Second, it reduces the failure rate of cases, which stem from the court process, documentation issues, and payment stream verification. Finally, our procedure frees you and your client from complex and time consuming paperwork.

With every case, the Hub Business Trust acts as the principal buyer and commits capital to buy each case prior to marketing. We have a deeply vested interest in making sure that the purchased payment streams are meticulously vetted before placing them In Stock.

Only after we have painstakingly scrutinized and thoroughly vetted each payment stream is it made available to your client to fund and close. SMA Hub’s closing book details every aspect of our procedures and your client’s transaction.