In today's Chicago Sun Times nationally known personal finance and investment expert Terry Savage shows her strong support for structured settlements in her article "Big Lawsuit Winnings Need To Be Structured". It's a good read and includes quotes from NSSTA member Kelly Ramsdale, of Denver, Colorado.
While I thank Terry Savage for recognizing the benefits of our unique product, there are two technical aspects of the subject matter Savage presented in the article which should be clarified for members of the public, judges and the bar:
The Term "Structured Settlement"
Technically the term "structured settlement", if we were use the definition at IRC 5891(c)(1), refers only to those transactions where income represents damages that are excludable from income (i.e. income tax free) under IRC 104(a)(1) and IRC 104(a)(2) and certain other criteria set forth in IRC 130. A structured settlement's tax deferred relative is called a non qualified assignment. A lottery winning annuity or contest winning annuity IS NOT a structured settlement.
The Term "Structured Attorney Fee"
Savage correctly recognizes the value, to attorneys, in a structured attorney fee. However, with respect to the structuring of attorney fees, the memorializing of the transaction in a settlement agreement IS important, BUT NOT in itself conclusive. Attorneys should consult their own structured settlement consultant who can ask the correct fact finding questions and liase with their tax advisor to help make sure that the structured attorney fee solution fits the form of business entity and form of retainer agreement.
An injured party is best served by someone with the proper professional credentials and experience, who they get along with
You may check on your own to verify the professional credentials of your broker or planner through a number of online resources. A referral from your attorney is also one place to start.
Readings on Structured Settlement Credentials from prior posts
The Value of A Professional Designation
Continued Ed a Must For Settlement Brokers and Settlement Planners
Structured Settlement Broker and Settlement Planning Credentials
Merely stating one is "plaintiff exclusive" means little as readers have seen. One firm has solicited and continues to solicit business on the basis that it is "plaintiff exclusive" and it was recently discovered that three of its founding partners each declared (one more than once!) , under penalty of perjury, to the United States Department of Justice, that they had provided substantial services to defendants in "each of the past 3 years" for the purpose of getting placed on the United States Department of Justice (defense) approved list of annuity brokers.
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