Beyond Structured Settlements

Interview with SSP President Joe Tombs

Joe Tombs is currently completing the first year of a two-year term as President of the Society of Settlement Planners (SSP). SSP's 2017 Annual Conference is scheduled for March 1-3 in Las Vegas. As Tombs prepares for this event, he agreed to answer a few S2KM questions about SSP's current status and future direction. In a prior S2KM blog post, Tombs responded to the AIG Class Action Lawsuit - stating SSP is "neutral" and that SSP, as an association, has decided as a matter of policy to abandon taking any “political” positions.

S2KM: Joe, thank you for agreeing to this interview. To further clarify SSP's new "no political positions" policy, you have also stated that SSP is now neutral about single-claimant 468B Qualified Settlement Funds - one of the most contentious issues within the primary structured settlement market during the past several years. Just to confirm, are you saying the SSP, as an association, no longer supports and/or will no longer advocate for single-claimant 468B QSFs?

TOMBS: That is correct. Our refusal to take a position should not be misunderstood to imply anything about our individual members. The SSP has been a zealous advocate of the single-claimant QSF in the past and I doubt any of our members have changed their opinions on the subject. We are not asking our members to suppress or to modify their own beliefs.

S2KM: What about factoring which arguably represents the most divisive political issue within the structured settlement market? If SSP is neutral, how do you explain SSP's current membership policy which to use your own words "is open to anyone interested in comprehensive settlement planning as long as they are not engaged in factoring". Doesn't SSP's membership policy itself represent a "political position"?

TOMBS: The SSP does not have an opinion on factoring. Several years ago, we held a conference in which many participants from factoring companies attended and participated. Their presence at our meeting annoyed some SSP members and a special meeting of members was called to address this issue. At that meeting, the membership voted almost unanimously to close off new membership to those applicants who were active in the factoring industry. We also decided not to expel the very few of our members who had drifted into factoring. Our individual members' views on factoring are varied and generally quite negative, but the reason factoring representatives are excluded from membership centers on the fact that we want to focus on planning at the time of settlement. (Tombs' emphasis). My personal opinion is that there is nothing wrong with a person who ethically engages in factoring, but that the world would be a net better place if factoring did not exist.

S2KM: What do you consider to be your most significant accomplishments during your first term as SSP President?

TOMBS: Recognizing we still have more than six weeks left to achieve first year objectives, I am especially proud of four accomplishments: 1) SSP has substantially expanded its membership; 2) we have re-focused on professional settlement planning as our primary Mission and purpose; 3) we have pretty much put to bed the idea that we oppose the National Structured Settlement Trade Association (NSSTA); and 4) we have developed a new set of Professional Practice Standards which we will introduce during our 2017 Annual Conference.

S2KM: How large is SSP and where are you finding new members?

TOMBS: I anticipate we will meet our goal of having 300 members by the time of our 2017 Annual Meeting. Many of our new members are trust officers, financial planners, special needs trust attorneys and staff from settlement planning practices. The new face of the SSP is truly the new faces at the SSP and the different perspectives they bring are propelling us forward in an exciting new direction.

S2KM: Have structured settlement annuity providers supported the concept of "comprehensive settlement planning"? If not, why not?

TOMBS: I don't think most structured settlement annuity providers understand the significance of settlement planning - or how it differs and/or relates to structured settlements. They are just beginning to wake up to the concept and realize how important and how effective the settlement planning model can be. My experience has shown that whenever a plaintiff attorney sees and understands the settlement planning model, they will never again be satisfied with a structured settlement broker who only offers one product. Think about what happened to flip phone providers when smart phones hit the market. I predict the same thing will happen with settlement planning. If structured settlement annuity providers wait too long to transition, trust companies will have captured first mover advantage.

S2KM: At one time, the term "settlement planner" was viewed by many structured settlement stakeholders as an inflated synonym for "plaintiff broker". How would you differentiate a professional settlement planner from a structured settlement consultant?

TOMBS: Until recently, that view was entirely accurate. A plaintiff broker would simply order new business cards with the new title ("Settlement Planner") proudly displayed. Today, however, that transition creates changes in expectations, applicable standards of care, and required levels of disclosure. A structured settlement consultant approaches an engagement with a product in mind. By comparison, a settlement planner (with access to multiple products) first gathers information about the goals of the injury victims and his/her family, analyzes the data, works out a written plan, and implements the plan. A settlement planner does not play the role of a structured settlement broker, if at all, until the last step.

S2KM: What is a "comprehensive settlement plan" and how does it differ from a "structured settlement"?

TOMBS: A structured settlement is a product. A "comprehensive settlement plan" is a blueprint. It is a written document that contains a summary of the detailed analysis of the client's situation, capacities, goals, priorities, needs, and resources - and the strategies and products that will best help that client use the settlement proceeds to successfully transition into a post-settlement life in a way that allows them to accomplish their highest priority goals. The settlement planner uses the plan to guide the injury victim through the settlement process. Many of my settlement plans do not include structured settlements, but most do.

S2KM: What role(s) do you see for structured settlement annuities in settlement planning?

TOMBS: Structured settlements provide tax-free guaranteed cash flows that can be matched to the exact time that the cash flow is projected to be needed. It is a valuable tool in a settlement planner's toolbox. Carpenters love their hammers, but I would never hire a carpenter who showed up to work with only a hammer.

S2KM: What is SSP's current relationship with NSSTA and what would you like it to be?

TOMBS: Most of the SSP members who produce structured settlements are also members of NSSTA. The SSP's past opposition to a few of NSSTA's political positions has frayed the relationship despite great strides to mend the fences by both sides. Today, the SSP leadership fully supports NSSTA and its Mission to preserve and protect structured settlements. I believe the two organizations are symbiotic - if one does better, so does the other.

S2KM: How are SSP and NSSTA different from SSP's perspective? Do we need two associations or should their efforts be combined?

TOMBS: SSP and NSSTA are two very different organizations with completely different Missions. We share a common ancestry, but we have evolved into separate species. The difference, which is evident in our names, is not subtle, semantic, or political. Today, most of our members, sponsors and seminar attendees do not even sell structured settlement annuities. Let that fact settle in for a minute and you will begin to comprehend the extent to which the SSP and settlement planning have evolved.

S2KM: What is the scope of SSP's new "Professional Practice Standards"? Will they Replace SSP's current "Standards of Professional Conduct"? If not, how are they different?

TOMBS: At our 2017 Annual Meeting, we will announce and release practice standards that will define settlement planning and authoritatively set out the scope of the practice of settlement planning. Don't expect something complicated. SSP's Professional Practice Standards will be simple, profound statements. They will be different from a Code of Ethics or our Code of Professional Conduct. Our current Code of Professional Conduct is too structured settlement centric and is currently under review by an SSP committee. I suspect it will receive major modifications soon.

S2KM: What is the current status of the Registered Settlement Planner (RSP) Program? How many professionals currently possess the RSP designation?

TOMBS: The RSP designation is administered by a separate Board. The number of RSP designees is small - probably just over twenty. The program was dormant for a long time and has now been freshly updated with several students enrolled.

S2KM: Looking ahead to your second term as SSP President, what are SSP's greatest challenges?

TOMBS: We can't grow the number of professional settlement planners fast enough to keep up with market demand. This forces us to focus on two goals - increasing our membership and increasing the professionalism of our craft. We are making progress on both fronts, but we simply cannot go far enough or fast enough to meet the demand. Another great challenge is that we face resistance from entrenched businesses that actively try to slow us down to allow them to catch up.

S2KM: Joe, thank you for taking time to participate in this interview. Congratulations for your progress with SSP and best of luck for another outstanding SSP educational conference March 1-3 in Las Vegas.

2015-2016 Educational Conferences

During a transitional era for both personal injury settlement planning and structured settlements, participating professionals are fortunate to have multiple upcoming educational opportunities to update and expand their knowledge. Here is an overview of recommended upcoming national conferences listed chronologically. Note: some associations restrict conference attendence to association members.

1. NAMSAP 2015 Annual Conference - September 30 - October 2 in New Orleans. The National Alliance of Medicare Set-Aside Professionals (NAMSAP) is "the only non-profit association exclusively addressing the issues and challenges of the Medicare Secondary Payer Statute and its impact on workers’ compensation and liability settlements". Medicare set-aside arrangements (MSAs) represent an increasingly important submarket for structured settlements. One of the innovative features of this conference: NAMSAP has developed an App so attendees can stay connected before, during and following the conference. Among the speakers, S2KM's Managing Director, Patrick Hindert, and Ann Koerner will lead a discussion titled: "How the Affordable Care Act Impacts Medicare, Medicare Compliance and MSAs". For S2KM's most recent NAMSAP reporting, see: NAMSAP 2015 Winter Regional Conference .
2. Stetson 2015 SNT Conference - October 14-16 in St. Petersburg, Florida. Stetson Law School's National Conference on Special Needs Trusts (SNTs) is widely recognized as the preeminent educational forum for this topic. The two-day conference offers one day of "Basics" plus one day of "Advanced" SNT education plus two additional and optional pre-conference half-day programs ("The Tax Intensive" and "Pooled Trusts"). Similar to MSAs, SNTs represent a strategic submarket for structured settlements. Among important recent developments: 1) the impact of the Affordable Care Act (ACA) on existing and prospective SNTs; 2) The Special Needs Trust Fairness Act, recently approved unanimously by the U.S. Senate, would correct a previous legislative error and allow individuals with disabilities, who have capacity to create their own SNTs.
3. NSSTA 2015 Fall Educational Conference - October 28-30 in Phoenix, AZ. The National Structured Settlement Trade Association (NSSTA) is "the leading voice of the structured settlement industry" with nearly 1200 individual members. NSSTA has previously announced an "Industry Growth Initiative" - "designed to identify opportunities to expand the use of structured settlements and bring those opportunities to the structured settlement marketplace" - which appears to focus multiple growth-oriented goals NSSTA president Michael Goodman identified during NSSTA's 2015 Annual Meeting. The first progress report for this Growth Initiative is scheduled to occur during NSSTA's Fall Conference. As a prelude to its Growth Initiative, NSSTA commissioned a three-part survey of traditional structured settlement stakeholders which S2KM reviewed in previous blog posts: senior claims executives (Part 1); front line claims professionals (Part 2); and plaintiff attorneys (Part 3).
4. NASP 2015 Annual Conference - November 10-12 in Las Vegas. The National Association of Settlement Purchasers (NASP), "the only trade association related to the secondary market for structured settlements, ... is dedicated to ensuring the secondary market for [such] transfers remains fair, competitive, and transparent." Following years of conflict between the primary and secondary structured settlement markets, an historic "President's Panel" will highlight NASP's 2015 conference featuring the respective presidents of NSSTA (Michael Goodman) and NASP (Patricia LaBorde). This event was preceded by NSSTA inviting LaBorde to speak at the NSSTA 2014 Fall Educational Conference. and appears to signify increased cooperation between the two associations extending to legislation as well as education. Among other speakers, S2KM's Patrick Hindert will provide "A Primer on Special Needs Trusts and Medicare Set-Asides" for secondary market attendees. For S2KM's most recent NASP reporting, see: NASP 2014 Annual Conference .
5. Evolve 2015 QSF Symposium - November 12-13 in Memphis. Organized "to provide a forum for open dialogue that helps shape industry developments", Evolve Bank and Trust's Annual Qualified Settlement Fund (QSF) Symposium offers a valuable and unique addition to the growing number of personal injury settlement planning conferences and educational resources. Although Rev. Proc. 93-34 permits QSFs to make IRC 130 qualified assignments, and no tax authority exists prohibiting single claimant QSFs, structured settlement annuity providers currently refuse to accept single claimant QSFs which they broadly define to encompass claims by family members, plaintiff attorneys, lien holders and creditors. Evolve's recent symposiums have avoided the single claimant controversy and focused instead on other important QSF and settlement planning issues. For S2KM's most recent Evolve reporting, see: Evolve 2014 QSF Symposium.
6. NSSTA 2015 MSSC Program - November 18-21 at the University of Notre Dame. Complementing and extending its Certified Structured Settlement Consultant (CSSC) Professional Certification Program, NSSTA has added a new Master's Certificate in Structured Settlement Consulting (MSSC). This program is one of multiple new educational initiatives, including Structures 202 (a comprehensive program of case management fundamentals and business development opportunities) and "NSSTA University" (whereby NSSTA will partner with any member to secure CE credits for member-sponsored educational seminars or insurance claims departments or law firms), which NSSTA is offering to attract and train "Next Generation" professionals to grow the structured settlement market.
7. NAELA 2016 Summit - January 28-30 in Newport Beach, CA. The National Academy of Elder Law Attorneys (NAELA) was the first and remains the largest U.S. professional association focused on the needs of elder and special needs law attorneys. NAELA was founded in 1986 and now consists of more than 4300 attorney members. Because NAELA was slow to embrace special needs as a separate strategic market, NAELA members independently formed the Special Needs Alliance (Alliance) and the Academy of Special Needs Planners (ASNP). Most Alliance and ASNP member, however, remain active NAELA members and look to NAELA as their primary political lobbying resource. NAELA member resources include the NAELA Journal which has published a series of excellent articles about the Affordable Care Act.
8. AANLCP 2016 Annual Conference - February 5-8 in San Antonio. The increasing number, importance and roles of life care planners represents one of the most significant developments S2KM has observed while attending recent structured settlement and settlement planning stakeholder educational conferences. Life care planners predominate the membership of NAMSAP and have been featured speakers at other recent structured settlement and settlement planning stakeholder conferences. Multiple life care planners exhibit at American Association for Justice (AAJ) national conferences. The American Association of Nurse Life Care Planners (AANLCP) is one of two national associations of life care planners. During 2014, S2KM published an interview with nurse life care planner Wendie Howland. Patrick Hindert's article "How the Affordable Care Act Impacts Life Care Planners" was featured in the 2014 Winter Issue of the AANLCP Journal.
9. AAJ 2016 Winter Conference - February 27 - March 1 - Boca Raton, FL. The American Association for Justice (AAJ, formerly ATLA) "is the world's largest trial bar" whose mission includes supporting "the work of attorneys in their efforts to insure that any person who is injured by the misconduct or negligence of others can obtain justice in America's courtrooms ..." Plaintiff attorneys, however, also perform essential settlement planning roles which include recommending appropriate product and service providers to their clients. As one result, plaintiff attorneys represent the primary marketing target for companies and professionals offering settlement planning products and services - as well as a logical priority marketing target for growing the structured settlement market. Multiple companies offering structured settlement, lien resolution, MSA compliance, life care planning, legal finance and economic consulting services were among the 141 sponsors and exhibitors at the AAJ 2014 Annual Meeting. NSSTA recently commissioned a Plaintiff Attorney Structured Settlement Survey.
10. ASNP 2016 Annual Conference - March 10-12 in Tucson, AZ. The Academy of Special Needs Planners (ASNP) and the Special Needs Alliance are both national associations of special needs attorneys most of whom are also members of NAELA and many of whom also increasingly specialize in personal injury settlement planning. ASNP recently opened its membership (with a vetting process) to non-legal (finance/insurance) professionals and also sponsored a 12-part Settlement Planning Webinar Series. Unlike educational programs sponsored by NAELA and SNA, ASNP's annual conferences are open to non-members. For S2KM's most recent ASNP reporting, see: ASNP 2015 Annual Conference - which includes a comparison of settlement planning vs. special needs planning.
11. SSP 2016 Annual Conference - March 10-12 - Tucson, AZ. Society of Settlement Planners (SSP) members "work with the injured party to create a comprehensive and integrated settlement plan focused on meeting the needs of the claimant." They also "seek to elevate the profession of settlement planning by promoting ethical industry standards, providing education and certification and knowledge transfer among its members." For the first time, SSP's 2016 conference will feature joint educational sessions and social events with ASNP. For S2KM's most recent ASNP reporting, see: SSP 2015 Annual Conference Part 1 and Part 2.
12. NSSTA (April 6-8 in Palm Springs, FL), NAELA (April 7-9 in Denver) and AAJ (July 23-26 in Los Angeles) have also separately announced their 2016 Annual Meetings.

ASNP 2015 Annual Conference

The Academy of Special Needs Planners (ASNP), one of three national associations of special needs attorneys (the others being the National Academy of Elder Law Attorneys (NAELA) and the Special Needs Alliance (SNA), hosted its ninth annual educational conference March 26-28, 2015 in Charlotte, North Carolina.

Special needs attorneys are one of several professional groups who participate in, and are helping to define, the evolving personal injury settlement planning market. Other settlement planning professionals and associations include: structured settlement consultants (SSP and NSSTA); Medicare set-aside professionals (NAMSAP) and life care planners (AANLCP).

Unlike educational programs sponsored by NAELA and SNA, ASNP's annual conferences are open to non-members. ASNP's programs consistently provide superior learning experiences featuring prominent speakers and comprehensive handout materials.

ASNP 2015 SPEAKERS AND TOPICS

• Avram Sacks - "Childhood Disabled Beneficiary Benefits"
• Janet Lowder - "Family Law Issues for a Child or Spouse with Special Needs"
• Thomas Brinker and Vincent Russo - "Tax Traps for Families with Special Needs Children"
• Theresa Varnet and Fredrick Misilo - "SSA's New Trust Guide"
• Larry Rocamora - "Leaving Retirement Benefits to Persons with Special Needs"
• Theresa Varnet and Nancy Chudacoff - "Understanding the ABLE and the Disabled Military Child Protection Act"
• Scott Solkoff and Ann Koerner - "How the Affordable Care Act has Changed Settlement Planning and Special Needs Planning"
• Ask the Experts Panel

Based upon the settlement planning mandate "know your client", which should include your client's legal and financial challenges before, during and following settlement, all of these topics arguably are relevant to settlement planners. Three of ASNP's 2015 educational topics, however, ("SSA's New Trust Guide", "Understanding the ABLE Act" and the "Affordable Care Act") are especially important.

S2KM has reported previously about the ABLE Act as well as the impact of the ACA on structured settlements and settlement planning - including a featured article in the Winter 2014 Journal of Nurse Life Care Planning written by S2KM Managing Director Patrick Hindert titled "How the Affordable Care Act Affects Life Care Planners."

SSA New Trust Guide

Theresa Varnet and Fredrick Misilo's 2015 ASNP presentation about the Social Security Administration's (SSA) new Trust Guide introduced a new settlement planning topic which was repeated with permission and acknowledgments at the SSP 2015 Annual Conference by ASNP National Director Kevin Urbatsch.

The background to the new SSA Trust Guide was a lack of uniformity among SSA Regions especially in reviewing (d)(4)(A) self-settled special needs trusts (SNTs) which are frequently funded with structured settlements as part of personal injury settlement plans. Growing frustrations among SNT stakeholders peaked in May 2012 when the SSA issued a new POMS (SI01120.203b) , without advance notice, creating changes to the "sole benefit rule" resulting in the disqualification of many SNTs.

Note: The Program Operations Manual System (POMS) is "a primary source of information used by Social Security employees to process claims for Social Security benefits."

Responding to complaints from a group of SNT advocates, then SSA Commissioner Michael Astrue initiated a series of meetings in January 2013 between SSA senior staff members and the advocates who had organized themselves into the SSI Advocacy Committee. Many issues/problems were identified and discussed. One result was the new SSA Trust Guide released April 23, 2014 to be used for national SSA trust training and SSA Regional trust evaluation - with the POMS still considered the SSA's primary resource.

Unfortunately, there are some problems with the new SSA Trust Guide - and one of the problems concerns structured settlements. The Trust Guide states that additions to a (d)(4)(A) SNT after age 65 results in disqualification with no mention of the exception that exists in the POMS (SI 01120-203b.1.C) for structured settlements.

NOTE: during the SSP 2015 Annual Conference, NSSTA Executive Director Eric Vaughn identified another problem (d)(4)(A) SNT's funded with structured settlements are experiencing in some states. Although no evidence exists the Deficit Reduction Act of 2005 (DRA) annuity rules are applicable to structured settlements, some state SSA and/or Medicaid employees have attempted to disqualify SNTs if they include structured settlements that violate those rules. For background, see S2KM's 2007 series titled "Inconvenient Questions".

The SSI Advocacy Committee has requested special needs attorneys and other settlement planners to report problems with the SSA Trust Guide to committee members Neil Winston, Mary O'Byrne and/or Theresa Varnet. Although barriers to progress exist, including hostility from the current Congress toward SSI as a welfare dependency and uncertainty whether SSA will continue to meet with advocates, the SSI Advocacy Committee hopes to expand upon its initial success.

ASNP Webinar Series

During the past 18 months, in addition to its annual educational conferences, ASNP has sponsored two separate 12-part webinar series addressing "settlement planning" and "special needs planning". Not only do ASNP's webinars identify topical components of these complex, overlapping professional disciplines, they also raise fundamental questions: what are the similarities and differences between "settlement planning" and "special needs planning"?

Some of the similarities and differences are apparent from the ASNP webinar topics themselves. Others are not.

Settlement Planning vs. Special Needs Planning

Both settlement planning and special needs planning involve disabled clients and require multi-professional teams including special needs attorneys, life care planners, care managers and financial advisors. In addition to personal injury victims, special needs attorneys represent and advise individuals suffering from birth defects and developmental disabilities and their families.

Although special needs attorneys play a variety of roles and provide a variety of products and services, their signature products are special needs trusts (SNTs). For settlement planning, the SNTs are most typically (d)(4)(A) self-settled and pooled trusts. For non-personal injury special needs clients, third party special needs trusts play a more important role.

While many special needs attorney move easily between settlement planning and special needs planning, the financial planning communities for each respective discipline are divided and their products are different. For example: MetLife is an important product provider for both settlement planning (structured settlement annuities) and special needs planning (life insurance; Medicaid annuities). Their respective internal departments, marketing resources and sales forces, however, are completely separate.

Settlement planners (particularly financial planners who sell structured settlements) are one-and-done product providers. They focus on the settlement recipient and how to distribute settlement funds. Their role ends when the settlement occurs. Regardless of discipline, the roles of special needs planners are more diverse (attorney; trustee; guardian); holistic (family and estate planning); and long-term (with settlement planning, for example - continuing well beyond the settlement).

Settlement planning, of course, includes many priority issues which rarely, if ever, occur with non-personal injury special needs planning. For examples: Medicare set-aside arrangements; IRC 468B qualified settlement funds; lien resolutions). Nonetheless, one of the key factors for the successful development of personal injury settlement planning is a better understanding of its relationship with special needs planning. ASNP's webinars and annual conferences provide an excellent continuing resource to accomplish this educational objective.

Links to S2KM reports about prior ASNP conferences: 2014; 2013; 2012; 2011; 2010; 2009; 2008; 2007.

SSP 2015 Annual Conference - 2

The Society of Settlement Planners (SSP) hosted its 2015 Annual Conference last week in Las Vegas with an unprecedented number of structured settlement association leaders as speakers and attendees including representatives from the National Structured Settlement Trade Association (NSSTA) and the National Association of Settlement Purchasers (NASP). For a list of SSP speakers and topics, see this prior S2KM blog post.

In his keynote address, SSP President Neil Johnson re-affirmed SSP's traditional commitment to "open dialogue" of industry issues with a mandate for "healthy, respectful discussion of all industry issues, controversial or not - rejecting the the temptation to sweep the uncomfortable under the carpet."

While seeking to engage all perspectives to identify shared permanent interests and discuss industry problems and issues, Johnson acknowledged and accepted that conference attendees would not agree on all issues - and they did not.

Some of the issues discussed:

• The need for structured settlement industry unity - encompassing education and, in some situations, political lobbying.
• How NSSTA and NASP are collaborating to improve state structured settlement protection statutes.
• Improving public relations by first acknowledging and addressing structured settlement primary and secondary market problems.
• The uniqueness of the structured settlement product and the need for better primary market self-regulation.
• The impact of "fiduciary standards" on settlement planning and the future of structured settlements.
• Collaborative primary/secondary market strategies for addressing "the darker side of factoring".
• Settlement planning as an important and distinctive growth strategy for structured settlements.
• Differentiating settlement planners from single-product plaintiff structured settlement brokers.
• Financial planners - a competitive threat or the next generation of structured settlement consultants and settlement planners?
• The inevitability and risks of "off-shore" settlement planning products in a globalized world.
• Lessons learned from the Executive Life debacle for claimants and their attorneys and advisors.
• How settlement planners and structured settlement consultants misuse life care planners and life care plans.
• The Social Security Administration's recent hostility toward special needs trusts (SNTs) and what it means for structured settlements.
• How and why settlement planners must learn to take control of the Medicare set-aside (MSA) process.
• The explosion of multi-claimant QSFs - a missed market for structured settlements?

None of these issues were resolved in Las Vegas. What did occur was a healthy exchange of ideas among leaders of historic structured settlement adversaries (NSSTA, SSP and NASP) with active participation from leaders of other settlement planning associations. The result: a unique industry gathering as much like a diplomatic conference as an educational event.

With NSSTA's President, Executive Director, and several members of its Board of Directors in attendance, whether and how NSSTA (as well as NASP) and its members will respond remains uncertain. NSSTA helped to initiate a more open industry dialogue during its own Fall 2014 Educational Conference by inviting SSP President Johnson and NASP President Patricia LaBorde to appear as featured speakers.

Structured Settlement Industry Unification

During the NSSTA Fall 2014 conference, Johnson outlined a "Blueprint for Industry Unification" which he and NSSTA President Kevin Silo continued to discuss in Las Vegas in a repeat performance of their "Presidents' Panel". Johnson's appeal for unity characterized "industry disarray" as a "threat to our future." Labeling diversity "good" and disparity "bad", he called for a united front before the public.

In Johnson's words: Lack of structured settlement industry unity is "a drain - a drain on financial resources ... a drain on productivity ... a drain on our public image ... a drain on physical and emotional health. Lack of unity diverts attention from productive projects. It always focuses attention on the negative, never on the positive. Lack of industry unity shows no partiality or favoritism for either NSSTA or SSP."

Both Johnson and Silo expressed optimism, however, about the future of structured settlements - especially in the context of generational transition. Johnson, in particular, highlighted potential opportunities amidst his self-described industry disparity, including a strengthened resolve and commitment for improvement and growth. According to Johnson and other settlement planners, the structured settlement industry needs a wakeup call - a fresh look and reevaluation that includes, but extends beyond, NSSTA's "protect and preserve" orientation.

Here are the core components of Johnson's proposed "solution" for structured settlement industry unity:

• Recognizing and accepting product and professional diversity.
• Identifying and pursuing permanent shared interests without necessarily agreeing on all issues.
• Engaging all perspectives to discuss industry problems and issues.
• Promoting and practicing settlement planning with the structured settlement annuity as a core strategic product.

The Future of SSP

Throughout its 15 year history, SSP has punched beyond its weight class. Born out of a troublesome recognition that the structured settlement playing field was seriously tilted to the disadvantage of plaintiffs and their advisors, SSP has helped bring respect and professionalism to the plaintiff side of the table by emphasizing "settlement planning", not "settlement selling".

Recognizing the strategic role of structured settlements, settlement planning nonetheless seeks the "best interest" of its injury victim clients and includes multiple products and multiple experts.

Despite these accomplishments, and perhaps because of them, SSP's future as an association is uncertain. NSSTA has more plaintiff structured settlement brokers than SSP and has been more successful in adding a new generation of members.

Other, well-organized, non-structured settlement professionals, such as special needs attorneys and life care planners, increasingly focus their marketing, educational programs and work product on settlement planning using SNTs and MSAs as their gateway.

As was evident in Las Vegas, however, SSP continues to raise the educational bar for an entire industry of settlement professionals. Settlement planning remains an evolving profession - largely unregulated with few industry standards. The ultimate role and growth potential for structured settlements within the settlement planning market have not yet been determined.

SSP's ability to organize an educational conference where an unprecedented cross-section of industry leaders engaged in civil discussions about strategic industry issues suggests SSP has an important continuing role within both the structured settlement and settlement planning markets.

For S2KM reporting about prior structured settlement and settlement planning conferences, see the structured settlement wiki.

SSP 2015 Annual Conference - 1

The U.S. structured settlement industry consists of three national professional associations - the National Structured Settlement Trade Association (NSSTA), the Society of Settlement Planners (SSP) and the National Association of Settlement Purchasers (NASP) - whose political differences frequently obscure their shared existential interests and, until recently, have restricted their opportunities for mutually-beneficial collaborative education.

NSSTA's 2014 Fall Educational Conference highlighted the issues of "generational change and challenges" and served as a precursor for improved association relationships by featuring SSP President Neil Johnson and NASP President Patricia LaBorde as guest speakers.

The SSP 2015 Annual Conference, to be held March 29-31 in Las Vegas will substantially expand this new educational chapter of industry dialogue by hosting an unprecedented number of association leaders as speakers. Among the highlights will be a repeat engagement of NSSTA's 2014 "Presidents' Panel" featuring current NSSTA President Kevin Silo and SSP President Johnson. Titled "Collaboration for the Greater Good", and moderated by Patrick Hindert, this panel promises to "doubledown" on solutions for achieving industry unity.

Additional association leaders scheduled to speak at the SSP Conference:

• Eric Vaughn - NSSTA's Executive Director is expected to emphasize the shared interests of all structured settlement professionals including plaintiff and defense representatives as well primary and secondary market participants. These shared interests being the protection and preservation of IRC sections 104(a)(2) and 130 plus the future growth of the primary market.
• Earl Nesbitt - NASP's Executive Director will be joined by Rhonda Bentzen, SSP 2015 Conference Chairperson and secondary market expert, to follow-up SSP's groundbreaking 2014 secondary market panel which first opened educational dialogue between primary and secondary structured settlement professional associations.
• Jack Kelly - NASP's lobbyist, who also spoke at last year's SSP conference, will provide his perspective on political changes taking place in Washington D.C. and how they might impact structured settlements.
• Kevin Urbatsch - The National Director of the Academy of Special Needs Planners (ASNP) recently introduced and helped organize ASNP 12-part "Settlement Planning" webinar series. In Las Vegas, Urbatsch will address recent attacks by the Social Security Administration on litigation-generated special needs trusts.
• Wendie Howland - Editor of the American Association of Nurse Life Care Planning (AANLCP) Journal, Ms. Howland will discuss settlement planning from a life care planning perspective. She will highlight the increasing role of life care planners in allocating damages for Medicare set-asides (MSAs) and as a result of the Affordable Care Act. In addition, she will advise structured settlement consultants and settlement planners how to better utilize life care plans to improve their own work product.

Additional SSP speakers and topics:

• Joseph Dehner - A prominent international attorney and co-author of the legal textbook "Structured Settlements and Periodic Payments", Dehner will discuss "Off-Shore Funding Companies" and their increasing role in the structured settlement market.
• Joseph DiGangi, Shannon Fitzgerald and Phillip Kruse - this panel of experts, moderated by Patrick Hindert, will analyze the application of "fiduciary standards" to settlement planning and settlement planners. Their presentation will feature a case study, review SSP's Standards of Practice, discuss NAIC Model Regulations, consider the 2006 Saltzburg/Chemerinsky memos, and suggest best practices.
• Edward Stone - A legal representative for many Executive Life of New York short-fall victims who continues to seek restitution for his clients, Stone will offer his opinion as to whether some settlement planners remain at risk in the ongoing ELNY litigation.
• Joseph Tombs - A lawyer, certified financial planner and former SSP President who helped organize SSP's Registered Settlement Planner (RSP) certification program, Tombs will outline his recommended process for developing a settlement plan.
• Jack Meligan - Also a former SSP President as well as a recognized settlement planning expert, Meligan will provide an MSA update with his perspective on how MSAs fit into settlement planning.
• Jeremy Babener - A prodigious structured settlement author and industry tax expert who also serves as Chairman of SSP's Legal Committee, Babener will introduce SSP's new website and discuss new SSP Legal Committee initiatives.
• Bryn Poland - A leading Qualified Settlement Fund (QSF) expert, who has served as attorney, trustee and/or administrator for numerous QSFs, Ms Poland will explain how and why the multi-claimant QSF market is growing rapidly despite the single claimant pullback within the structured settlement market.

For S2KM's reporting about prior structured settlement and settlement planning professional conferences, see the structured settlement wiki.

Structured Settlements 2014 - Settlement Planning

During the late 1970s, and throughout the 1980s, when defendants retained exclusive control of structured settlements, many brokers and their liability insurance company clients referred to unsuccessful sales as "cash outs". Their professional interests and curiosity were narrowly defined and focused upon their own product to the exclusion of other settlement related products and services.

With the advent of plaintiff structured settlement brokers, continuing legislative and regulatory developments, plus an expanding array of settlement planning professionals, products and product providers, structured settlements are now viewed by most stakeholders as a subset of the larger and more complex personal injury settlement planning market.

For future success, a new generation of structured settlement leaders must look beyond structured settlements and learn to re-position their product as a fundamental and catalytic settlement planning component. This strategic adjustment requires a more comprehensive understanding of, and interaction with, other professional associations whose members also provide settlement planning products and services.

During 2014, S2KM attended 13 national educational conferences sponsored by such professional associations. What follows are 2014 summaries, from a settlement planning perspective, of the educational programs offered by these professional associations plus links to related S2KM reporting. Prior S2KM blog posts provide 2014 summaries of the primary and secondary structured settlement markets. A subsequent S2KM blog post will summarize continuing 2014 developments related to ELNY and Reliance.

American Association for Justice (AAJ)

The role of personal injury attorneys historically has encompassed settlement planning and negotiation as well as litigation. As settlement planning has become increasingly complex, however, personal injury attorneys now require the services of other settlement planning professionals including: tax attorneys, special needs attorneys, settlement trustees, financial planners, structured settlement specialists, life care planners, case managers, economists, Medicare set-aside (MSA) specialists and damage allocators.

Regardless of case complexity, plaintiff attorneys continue to perform the following essential settlement planning roles:

• Recognizing settlement planning issues which impact their clients;
• Recommending appropriate settlement planning professional resources to their clients; and
• Retaining ultimate responsibility for effectuating settlements.

As one result, plaintiff attorneys represent the primary marketing target for for companies and professionals offering settlement planning services. Seven primary market brokers, one structured settlement annuity provider and one factoring company were among the 141 sponsors and exhibitors at the AAJ 2014 Annual Conference which also included companies offering lien resolution, MSA compliance, life care planning, legal finance and economic consulting services.

Notable features of the 2014 AAJ conferences:

• AAJ's educational programs focused on litigation issues with no structured settlement, no Affordable Care Act (ACA) and almost no settlement planning presentations.
• Exhibiting structured settlement brokers shared one distinguishing characteristic - their product and service offerings extended far beyond traditional structured settlements.

Related Resources:

• AAJ 2014 Winter Meeting
• AAJ 2014 Annual Meeting

Society of Settlement Planners (SSP)

SSP is a professional association most of whose members are plaintiff structured settlement brokers. SSP's 2014 Annual Conference provided three important contributions to settlement planning.

First, SSP President Neil Johnson's SSP keynote speech, which he repeated at NSSTA's Fall Conference, highlighted continuing polarization among structured settlement professionals and proposed the following solutions: 1) recognizing and accepting product diversity; 2) focusing on client and customer service; 3) identifying and pursuing permanent shared interests without necessarily agreeing on all issues; 4) engaging all perspectives to discuss industry problems and issues; 5) improving relationships among stakeholder groups; 6) promoting and practicing settlement planning not settlement selling.

Second, consistent with Johnson's proposed unification solutions, SSP's Secondary Market Panel featured two leading structured settlement transfer experts whose clients typically oppose each other in secondary market cases: NASP Executive Director Earl Nesbitt and Stephen Harris, former co-Chairman of NSSTA's legal committee.

Third, SSP speaker Michele Fuller identified her list of 2014 settlement planning "game changers" as a baseline for industry discussion:

1. Affordable Care Act.
2. Lien resolution statutory and regulatory developments.
3. Federal recognition of same-sex marriages.
4. Wrongful death caps determined unconstitutional.
5. State and federal tax reform.
6. Potential reductions in social security benefits.
7. MSAs in liability cases.
8. Settlement planning goes cyber.
9. Increasing need for Qualified Settlement Funds.
10. Increasing number of persons with disabilities.

Related Resources - SSP 2014 Annual Conference

• Part 1 - Secondary market panel.
• Part 2 - Conference summary.

National Structured Settlement Trade Association (NSSTA)

By inviting NASP President Patricia LaBorde and SSP President Neil Johnson to speak at its members-only 2014 Fall Educational Conference, NSSTA took a symbolic step toward restoring its original vision as articulated by David Ringler, NSSTA's first president: "a place where everyone and anyone can sit down with each other and discuss the issues and viewpoints regardless of beliefs is the most important reason for NSSTA."

For the past several years, NSSTA's leadership has superimposed a political litmus test for membership, as well as for topics and speakers at its educational conferences. NSSTA's near-sighted strategy has limited the potential growth of structured settlements within the larger and more complex settlement planning market and created multiple challenges for the next generation of structured settlement leaders.

Structured settlements, however, represent a core settlement planning product with emerging product improvements and nontraditional products demonstrating the potential for settlement planning market expansion. In addition, NSSTA's Fall conference underscored, and re-enforced, NSSTA's and NSSTA members' strategic settlement planning relationship knowledge about and with: 1) plaintiff attorneys; 2) insurance associations; 3) insurance claims adjustors; 4) national consumer associations; 5) U.S. Congressional members; and 6) MSA administrators - as well as with SSP and NASP.

Related Resources:

• NSSTA 2014 Fall Educational Conference
• Potential "Game Changing" Structured Settlement PLR
• Structured Settlements 2014 - Primary Market

National Association of Settlement Purchasers (NASP)

Assuming settlement planning includes adjustments during an injury victim's lifetime, structured settlement transfer (factoring) companies should be included among settlement planning participants. Like NSSTA, its primary market counterpart, NASP and its members face serious challenges which NASP president Patricia LaBorde acknowledged during NASP's 2014 Annual Conference.

"There are some forces working against us right now" Laborde stated, "and we need to remain diligent so our customers (structured settlement recipients who sell payment rights to NASP member companies) continue to have access to liquidity." These "negative" forces include predicted secondary market "chaos" resulting from the Washington Square v. RSL case as well as market restrictions resulting from anti-assignment lawsuits.

Shared educational dialogue among representatives of NASP, NSSTA and SSP during 2014 appear to support the possibility of increasing primary and secondary market integration as predicted by Peter Arnold during his NASP conference presentation.

Related Resources:

• NASP 2014 Annual Conference
• Structured Settlements 2014 - Secondary Market

Academy of Special Needs Planners (ASNP)

ASNP is one of three national associations of attorneys whose members practice special needs (SN) planning. SN planning encompasses individuals with congenital and developmental defects, as well as personal injury victims, and therefore represents a parallel market which overlaps with personal injury settlement planning.

For the past eight years, ASNP has sponsored some of the best educational programs addressing settlement planning topics including such fundamental issues as: "know your client", "needs analysis", "best practices", "industry standards" and "product suitability", as well as "professional responsibility, qualifications and liability".

Among other topics, the ASNP 2014 Conference expanded previous ASNP educational programs about the Patient Protection and Affordable Care Act (ACA aka "Obamacare") including a multi-professional "ACA Panel" consisting of: David Lillesand (attorney); Ann Koerner (life care planner); and Scott MacDonald (investment adviser).

Other settlement planning topics addressed during ASNP's 2014 Annual Conference:

• Blaine Brockman and Patricia Kefalas Dudek spoke about "Housing, Food Assistance, Employment Benefits" - critical topics for many people with disabilities which are rarely addressed at structured settlement and settlement planning educational conferences.
• Cynthia Barrett discussed "Post-Windsor Issues for LGBT Couples & Children" - another settlement planning subject other settlement planning conferences failed to encompass.

Expanding its settlement planning educational programs, ASNP is currently sponsoring a 12-part settlement planning webinar series which demonstrates both the growing importance of settlement planning for SN attorneys as well as the broad scope of settlement planning topics.

Related Resources:

• ASNP 2014 Annual Conference
• ASNP Settlement Planning Webinar Series
• ACA and Future Medical Expenses

National Alliance of Medicare Set-Aside Professionals (NAMSAP)

NAMSAP is the only national professional association whose singular focus is Medicare Set-Aside (MSA) arrangements. NAMSAP's growth has paralleled the expansion of workers compensation MSAs (WCMSAs) to satisfy the requirements of the Medicare Secondary Payer (MSP) Act. Enacted in 1980, the MSP Act requires certain insurers, including liability, automobile, no-fault and workers compensation insurers, to make payment first for services to Medicare beneficiaries regarding claimed injuries, with Medicare responsible only as a “secondary payer.”

The Center for Medicare & Medicaid Services (CMS) published a WCMSA Reference Guide (WCRG) on March 29, 2013 plus a WCRG Version 2.0 on November 7, 2013. Both address structured settlement issues and provide guidelines for their utilization. WCMSAs represent one of the few submarkets where structured settlements sales have increased since 2008 - in large part because the method CMS requires for calculating WCMSA present values provides an inherent cost advantage for annuities compared with lump sum alternatives.

CMS withdrew its Notice of Proposed Rulemaking (NPRM) related to liability MSAs in October 2014 because it failed to gain approval from the Office of Management and Budget (OMB). Therefore, settlement planners must continue to analyze each liability case individually to determine whether and how to protect Medicare's interests.

During NAMSAP's 2014 Regional Conference, Roy Franco predicted the following settlement planning changes likely to result from the Bipartisan Budget Act of 2013, implementation of the ACA and the still anticipated CMS rules for liability MSAs: "workers' compensation, liability and no-fault insurers will all become primary payers vis a vis Medicare, Medicaid and ACA health providers" as part of integrated settlement planning models similar to WCMSAs." Franco added, however, that different state models are likely to develop as a result of both state-specific collateral source rules and the new Medicaid reimbursement rules promulgated by the Bipartisan Budget Act of 2013.

Related Resources

• NAMSAP 2014 Regional Conference
  • Part 1
  • Part 2
• NAMSAP 2014 Annual Meeting
• Bipartisan Budget Act of 2013

Evolve Qualified Settlement Fund (QSF) Symposium

Organized "to provide a forum for open dialogue that helps shape industry developments", the 2014 Evolve QSF Symposium avoided the single claimant controversy and focused instead on other important QSF and settlement planning issues including:

• How QSFs reconfigure the traditional settlement planning process.
• QSF-related compensation issues for administrators and structured settlement brokers.
• The increasingly important settlement planning roles for life care planners and case managers.
• QSF-related tax issues such as state taxation, foreign structured settlement assignment companies and structured attorney fees.

Related Resources

• Evolve 2014 QSF Symposium
• Single Claimant QSFs Revisited
• "How the ACA Affects Nurse Life Care Planners"
• Wendie Howland Interview

National Academy of Elder Law Attorneys (NAELA)

NAELA was the first and remains the largest U.S. professional association focused on the needs of elder and special needs law attorneys. Responding to its own strategic challenges, NAELA organized its 2014 Annual Conference to address what it perceives to be its two primary strategic issues: 1) the future needs of persons with disabilities; and 2) the future of elder law.

Compared with ASNP, however, NAELA's educational programs rarely address settlement planning or structured settlements. When NAELA members discuss special needs planning, many tend to think about developmental (as opposed to personal injury) disabilities. Unfortunately, many NAELA members view structured settlements negatively despite familiarity with the concept and a general affinity for annuities.

Related Resources

• NAELA 2014 Annual Conference
• Person-Centered Planning
• Cornell Disability Studies, Research, Statistics

Evolve 2014 QSF Symposium

Despite unresolved issues, utilization of IRC 468B Qualified Settlement Funds (QSFs) in "single event" cases, as well as class action and mass tort cases, is expanding, and increasingly represents the preferred method for resolving complex personal injury claims, according to participants at the Third Annual QSF Symposium sponsored by Evolve Bank and Trust on November 14, 2014 in Memphis, Tennessee.

Various speakers estimated the number of QSF cases annually currently exceeds 2500, equally split between single event cases and class action/mass tort cases, increasing by 25% per year. This expansion has occurred as more settlement planning stakeholders learn about the advantages of QSFs - and despite single claimant QSF tax uncertainty.

Although Rev. Proc. 93-34 permits QSFs to make IRC 130 qualified assignments, and no tax authority exists prohibiting single claimant QSFs, structured settlement annuity providers currently refuse to accept single claimant QSFs which they broadly define to encompass claims by family members, plaintiff attorneys, lien holders and creditors.

Organized "to provide a forum for open dialogue that helps shape industry developments", the 2014 QSF Symposium completely avoided the single claimant controversy and focused instead on other important QSF and settlement planning issues.

Topics and Speakers

• Introduction and Welcome - Andrew Cook
• QSF Administrator Control Systems and Fraud Protection - Brian Berning
• QSF State Tax Issues - Mike May
• Tax Issues for Foreign Structured Settlement Assignment Companies - Jeremy Babener
• Calculating Settlement Awards - Chris Lordan
• QSF Settlement Planning Panel - Patrick Hindert (Moderator), Andrew Cook, Wendie Howland, Pi-Yi Mayo, Bryn Poland, Joseph Tombs.
• How New SEC Rules Impact QSF Money Market Fund Investments - John Rush.
• How Plaintiff Attorneys View QSFs - William Burns
• QSF Administrator Compensation Issues - Paige Balnum; Pi-Yi Mayo; Bryn Poland.
• QSF Attorney Fee Programs - Chris Shumate.

QSF Objectives and Benefits

In his legal treatise, "Qualified Settlement Funds and Section 468B", published in 2009, Robert Wood explains QSFs as follows: "Their primary objective is to gather and administer cash or assets and determine the amounts and exact nature of payments that the plaintiffs, attorneys, and other claimants will receive..... QSFs benefit both plaintiffs and defendants alike. They are separate entities for federal income tax purposes and are flexible and easy to establish."

Section 3.08B of "Structured Settlements and Periodic Payment Judgments" (S2P2J) summarizes the benefits of QSFs in more detail: "defendants obtain a binding release from liability by making a currently-deductible payment into a court or government-approved Fund; while claimants, who have no tax consequence as a result of this payment into a Fund, are then afforded as much time as they need to sort out important issues of their own, such as allocating settlement shares, obtaining court approvals for minors or other legally-disabled claimants, resolving liens (which sometimes involve complex pay-back and set-aside issues as to Medicaid and Medicare), and deciding on forms of distribution (whether cash, structured settlements, or special needs trusts that may be used to preserve eligibility for certain government benefits)."

QSFs reconfigure the traditional (ready; shoot; aim) settlement planning process:

1. Needs assessment
2. Design
3. Negotiation
4. Implementation
5. Monitoring

so that needs assessment and settlement design follow the negotiation (and funding) steps rather than precede them.

Highlighted Issues

• QSF Administrator - The QSF Symposium emphasized the important role of the QSF administrator as well as the services he or she may provide and/or require including: investment, expense and distribution management; tax reporting and filing; legal and regulatory compliance; and fraud control. The QSF administer appears best positioned to quarterback the QSF settlement planning team. An apparent need exists for more (and better qualified) QSF administrators.
• Life Care Planners and Case Managers - Life care planners and case managers are frequently overlooked in traditional settlement planning. Life care planners are rarely asked to revise their pre-trial and trial-focused life care plans to account for collateral sources or the actual amount of settlement funding. Case managers (who are separately certified) increasingly are retained to "monitor" settlement plans by providing post-settlement medical advice and services for serious personal injury victims.
• Compensation Issues - For QSFs to achieve their potential improvements for single event settlement planning, multiple compensation issues must still be addressed and resolved:
  • Administrators - The QSF Symposium devoted one of its panels to administrator compensation issues, including: who pays their fee? what fee is appropriate for what services? and how should the fee be calculated (flat fee; per claimant fee; or fee based on QSF earnings)? Complicating these issues, many attorney QSF administrators play multiple roles (trustee; administrator) in addition to drafting QSF documents and making court appearances.
  • Structured settlement brokers - In many single event QSFs, the plaintiff structured settlement broker plays key roles: 1) selecting and paying the QSF administrator; 2) performing "value added" settlement planning services as part of his/her contingent commission compensation. Not only do these arrangements create potential conflicts of interest ("needs based" selling determined by the needs of the broker and administrator), they also increase a broker's risk of loss in the the event of an unsuccessful structured settlement sale.
  • Additional compensation issues arise when: 1) a case settles with no allowance for QSF expenses; 2) a case involves minors or incompetents requiring a guardian and court to approve QSF expenses; and also because 3) in the current low interest rate environment, QSF fees often exceed investment yields. Although not discussed during the Symposium, defense structured settlement brokers have opposed QSFs fearing a reduction or the elimination of their contingent commission compensation.
• Tax topics - The QSF Symposium featured three tax topics:
  • State taxation - State taxation of QSFs is inconsistent with little guidance. Many states have not yet addressed QSF taxation. Potential penalties exist for failure to file including interest on any unpaid liability without any statute of limitations. QSF administrators are advised to follow a two step analysis: 1) can a specific state tax a QSF based upon the situs of the court or the administrator or the bank where funds are deposited? 2) assuming a filing obligation exists, how will a state tax a QSF - as a corporation or a trust?
  • Foreign structured settlement assignment companies - Potential tax issues exist for defendants, plaintiffs and the foreign assignment company. Can a defendant deduct its payment to a foreign assignment company? When does a plaintiff receive payments for tax purposes and what is the character of those payments? Does the foreign assignment company recognize income when it receives an assignment payment? If yes, will it be considered active or passive income or does a treaty override exist?
  • Structured attorney fees - When properly arranged, structured attorney fees allow a contingently-compensated attorney to defer portions of his or her compensation and pay tax upon receipt regardless of the type of case or whether the client receives a lump sum or periodic payments.
• Education issues - Single event QSF education is needed for plaintiff attorneys and judges who are still unfamiliar with the QSF concept. Among the most likely education providers are special needs attorneys who serve as QSF administrators or trustees and structured settlement brokers. In addition to litigating attorneys and judges, QSF educational targets should include other settlement planning stakeholders such as: liability insurers; settlement trustees, guardians; mediators; and life care planners.

Conclusion - Evolve's QSF Symposium offers a valuable and unique addition to the growing number of personal injury settlement planning conferences and educational resources. When Robert Wood's QSF legal treatise was published in 2009, he acknowledged his analysis "clearly enters unchartered ground". Congratulations to Chairman Andy Cook and Evolve Bank and Trust for helping to survey this unchartered QSF terrain by sponsoring an educational event specifically designed to promote discussion and exchange of ideas about QSF issues, standards and best practices.

For S2KM's complete coverage of 2014 structured settlement and settlement planning conferences, see the structured settlement wiki.

Fall 2014 Educational Resources

During this transitional era for both settlement planning and the primary and secondary structured settlement markets, participating professionals are fortunate to have multiple educational opportunities this Fall to update and expand their knowledge.

Conferences

• Stetson SNT Conference - October 15-17 in St. Petersburg, Florida.
• AANLCP Annual Conference - October 24-27 in Atlanta.
• NSSTA Fall Meeting - October 28-30 - La Jolla, California.
• NASP Annual Conference - November 4-6 in San Antonio, Texas.
• Evolve QSF Symposium - November 13-14 in Memphis.

Webinar - ASNP's 12-part Settlement Planning webinar series beginning October 1 and ending March 18, 2015.

Certification Program - NSSTA's 2014 Certified Structured Settlement Consultant (CSSC) Professional Certification Program - October 15-19 at the University of Notre Dame.

ACA Seminar - NBI's Affordable Care Act (ACA): Impact on Injury Settlements seminar - offered in multiple cities on alternative dates.

Journals

• NAELA Journal Fall 2014 - focuses on Guardianship issues.
• AANLCP Journal Fall 2014 - includes a survey and study of nurse life care planner roles.

Book Update - Release 56 of "Structured Settlements and Periodic Payment Judgments" (S2P2J) will be published latter this Fall.

S2KM will provide subsequent blog reports summarizing many of these programs and written materials.

For past S2KM reporting about professional educational conferences, see the structured settlement wiki.

Single-Claimant QSFs Revisited

Single-claimant qualified settlement funds (SCQSFs) represent one of the two most politically divisive issues within the structured settlement industry - with the National Structured Settlement Trade Association (NSSTA) opposing and the Society of Settlement Planners (SSP) promoting SCQSF use.

Tax expert Robert W. Wood , a prolific author, whose specialties include structured settlements and personal injury settlement planning, has published a new article in the June 23, 2014 of "Tax Notes" titled "Reprising Single-Claimant Qualified Settlement Funds".

QSFs, or section 468B funds, as explained in Wood's article, are designed to resolve litigation. "Their primary objective is to gather and administer cash or assets and determine the amounts and exact nature of payments that the plaintiffs, attorneys, and other claimants will receive..... QSFs benefit both plaintiffs and defendants alike. They are separate entities for federal income tax purposes and are flexible and easy to establish."

The benefits of QSFs are summarized in Section 3.08B of "Structured Settlements and Periodic Payment Judgments" (S2P2J): "defendants obtain a binding release from liability by making a currently-deductible payment into a court or government-approved Fund; while claimants, who have no tax consequence as a result of this payment into a Fund, are then afforded as much time as they need to sort out important issues of their own, such as allocating settlement shares, obtaining court approvals for minors or other legally-disabled claimants, resolving liens (which sometimes involve complex pay-back and set-aside issues as to Medicaid and Medicare), and deciding on forms of distribution (whether cash, structured settlements, or special needs trusts that may be used to preserve eligibility for certain government benefits)."

Wood has previously addressed SCQSF issues in multiple articles and conference presentations and, most significantly, in his 2009 legal textbook titled "Qualified Settlement Funds and Section 468B" . For background concerning Wood's views on SCQSFs, see these prior S2KM blog posts;

• Robert Wood and 468B Funds
• Robert Wood QSF Interview
• Robert Wood and 468B Funds - 2

Having surveyed the debate and framed the issues five years ago, at which time Wood concluded the proponents of SCQSFs had the better argument, Wood prefaces his new article by asking: "Has Anything Changed?"

Wood's new article:

• Reviews the legal background and arguments favoring and opposing SCQSFs as well as the requirements and advantages of QSFs.
• Confirms Wood's opinion favoring proponents' arguments for SCQSFs - while cautioning taxpayers to try to set up QSFs with multiple claimants:
  • "The language of the tax code and regulations suggests there should be no controversy."
  • "Reg. section 1.468B-1(c)(2) suggests the possibility of a single claim, mentioning 'one or more contested or uncontested claims' and an event giving rise to 'at least one claim asserting liability.'
  • "With the focus on the claim or claims, not the claimant or claimants, a plurality of claimants seems to be unimportant."
  • "Congress appears to have intended QSFs to operate as a statutory exception to both the economic benefit and constructive receipt doctrines."
• Highlights removal of the SCQSF issue (without IRS explanation) from the IRS priority guidance plan in 2009.
• Predicts the IRS is more likely to "establish some sort of antiabuse rule addressing the inappropriate use of QSFs to defer income rather than establishing a minimum number of plaintiffs or claimants."

Has Anything Changed?

Beyond removal of the issue from the IRS priority guidance plan, however, Wood's new article does not directly address his primary question: "Has Anything Changed" since 2009 that impacts the utilization of SCQSFs?

The answer is "Yes". Most significantly, unlike 2009, no structured settlement annuity providers currently accept SCQSFs. They have effectively shut down this strategic personal injury settlement planning opportunity for a wide scope of actual and/or potential structured settlement cases.

Prudential, for example, sent a communication to its structured settlement agents dated March 19, 2012 stating, in part:

• "Prudential recently reviewed its underwriting criteria with respect to single claimant QSF cases. As a result, effective immediately, we will no longer write cases stemming from a single claimant QSF."
• "Prudential defines a single claimant QSF as a fund either established for the benefit of a single claimant or, for multiple claimants who do not have “competing interests” (e.g., plaintiff family members). Prudential will not provide for “derivative” claims from the injured party, i.e., a loss of consortium or an emotional distress claim by the parents and/or siblings for the personal injury victim."
• "It is Prudential’s position that when the funds are deposited into a QSF for a single claimant, and there are no other factors to be negotiated under the settlement, the claimant has received economic benefit of the assets. Prudential does not consider lien holders or other non-claimant creditors (attorneys, medical providers, Medicare or Medicaid) as substantial additional obligations to be satisfied prior to the claimant’s ownership of the assets transferred to the QSF."

Despite the current closure of the SCQSF structured settlement market, SCQSF analysis and debate has expanded since 2009 - thanks significantly to Wood's SCQSF writing and speaking. Examples:

• Jeremy Babener's QSF Paper: "Structured Settlements and Single-Claimant Qualified Settlement Funds: Regulating in Accordance with Structured Settlement History". See:
  • Jeremy Babener's QSF Paper
  • S2KM Reviews Jeremy Babener's QSF Paper-1
  • S2KM Reviews Jeremy Babener's QSF Paper-2
  • Jeremy Babener Interview-2
• Martin Jacobson's QSF Presentation titled "The Ins and Outs of 468B Funds" at the NSSTA 2011 Annual Meeting wherein Jacobson identified what he termed "the real SCQSF questions":
  • Does a single claimant have economic benefit of the funds placed in the QSF?
  • Does the single claimant have "unqualified availability" of those funds?
  • Has IRC Section 130(c) been satisfied?
  • Is there going to be an IRS ruling applicable to single claimant QSFs?
  • In the continuing absence of such an IRS ruling, Jacobson quoted Robert Wood to "avoid the single claimant controversy" by establishing QSFs with multiple claimants.
• The Qualified Settlement Fund Symposium - For S2KM's reporting from the 2012 QSF Symposium, see these prior blog posts:
  • Part 1
  • Part 2

Opponents' Objections

Why do opponents object to SCQSFs - and why do they continue to broaden the scope of SCQSFs to encompass arguably multiple claims by family members, plaintiff attorneys, lien holders and creditors?

• Without more definitive tax clarification, structured settlement annuity providers are concerned about the original legislative intent of IRC section 468B, related economic benefit issues, and the potential litigation impact from lawsuits that could arise if SCQSFs are ruled invalid.
• Defendants and their insurers view structured settlements as valuable "needs analysis" and "bridge-the-gap" negotiating tools they would lose if single event personal injury cases were routinely resolved using QSFs.
• Defense brokers argue that SCQSFs will: 1) reduce the structured settlement market by eliminating defense incentive to promote structured settlements; and 2) eliminate defense broker commissions.

Although Robert Wood's most recent SCQSF article does not attempt to resolve these SCQSF objections (and they may not be resolvable), his SCQSF "reprising" hopefully will help motivate structured settlement and settlement planning stakeholders to better identify shared SCQSF interests and to seek further SCQSF tax clarification including what constitutes multiple claimants for purposes of IRC section 468B.

SSP 2014 Annual Meeting

"Unification not polarization!" Society of Settlement Planners (SSP) President Neil Johnson espoused this principle in his keynote address as the theme for SSP's 2014 Annual Meeting and Educational Conference.

Current industry polarization as identified by Johnson, and discussed by other SSP conference speakers, arguably encompasses:

• Plaintiff vs. defense structured settlement brokers.
• Primary vs. secondary structured settlement markets.
• Structured settlements vs. settlement planning.
• Settlement annuities vs. settlement trusts.
• Settlement planning vs. special needs planning.

Johnson's SSP keynote speech also highlighted and proposed solutions for industry polarization: 1) recognizing and accepting product diversity; 2) focusing on client and customer service; 3) identifying and pursuing permanent shared interests without necessarily agreeing on all issues; 4) engaging all perspectives to discuss industry problems and issues; 5) improving relationships among stakeholder groups; 6) promoting and practicing settlement planning not settlement selling.

Johnson, and subsequent SSP speakers, addressed one of the most diverse gatherings ever of structured settlement and settlement planning industry leaders. Speakers and attendees included members of NSSTA, NASP, NAMSAP, ASNP, SNA, NAELA and SSP as well as lien resolution experts, mass tort administrators, life care planners, settlement trustees, annuity providers and bloggers.

Except for Johnson as SSP's President, speakers expressed personal opinions and did not appear as representatives of other professional associations.

SPEAKERS - By Category and Listed Alphabetically

• Settlement Planners / Structured Settlement Broker/Agents - Michael Goodman; Donald McNay; Joseph Tombs.
• Structured Settlement Attorneys - Jeremy Babener; Stephen Harris; Patrick Hindert; Earl Nesbitt; Edward Stone.
• Product Providers - Daniel Durbin; David Hickey.
• Special Needs Attorneys - Michele Fuller; Kevin Urbatsch.
• Medicare Set-Aside (MSA) Experts - Christine Melancon; Sally Stalcup.
• Lobbyist - Jack Kelly.
• Social Media - Megan Hargroder.
• Customer Service - Bruce Loeffler.

S2KM Comments

Settlement Planning - S2KM has written previously (see: AAJ 2014 Winter Meeting) about expanding products and services offered by plaintiff structured settlement brokers. Joe Tombs' SSP presentation expanded this list and proposed a "fiduciary standard" for settlement planners. For personal injury settlement planning to emerge as a recognized profession, however, SSP (and/or other settlement planning participants) needs to address these fundamental questions:

• Which professionals and professional skill sets are needed to construct a settlement plan?
• What professional work product results in a settlement plan?
• What are the standard components of, and documentation for, a settlement plan?
• How much does it cost (professional fees, commissions, etc) to produce a settlement plan?
• What would a settlement planning "fiduciary standard" mean in terms of: "best interest", "full disclosure" and "informed consent"?
• What settlement planning licensing and e&o coverage are necessary and applicable to protect customers?
• Which professional associations include "settlement planners" and what certification programs do they offer?
• What settlement planning business models currently exist?

Industry Unification - SSP's 2014 conference represents a strategic milestone and challenge for future educational programs sponsored by structured settlement and settlement planning professional associations.

• SSP spotlighted structured settlement and settlement planning polarization as the foremost industry problem.
• SSP President Neil Johnson proposed sensible solutions which other SSP speakers echoed and effectively endorsed.
• Without endorsing specific speakers or topics, SSP's conference agenda addressed critical and divisive industry issues - and featured speakers offering alternative perspectives.
• SSP conference speakers and attendees represented an unprecedented gathering of settlement planning industry leaders.

Industry Game Changers - Speaker Michele Fuller's list of settlement planning "game changers" did not mention Executive Life of New York (ELNY) or the structured settlement secondary market - two divisive issues of continuing importance addressed by other SSP speakers (Edward Stone and the secondary market panel, respectively). Her Top-10 list, however, provides a baseline for future discussions among industry associations and participants:

1. Affordable Care Act.
2. Lien resolution statutory and regulatory developments.
3. Federal recognition of same-sex marriages.
4. Wrongful death caps determined unconstitutional.
5. State and federal tax reform.
6. Potential reductions in social security benefits.
7. MSAs in liability cases.
8. Settlement planning goes cyber.
9. Increasing need for Qualified Settlement Funds.
10. Increasing number of persons with disabilities.

Congratulations to SSP, and especially conference chairperson Rhonda Bentzen, for maintaining SSP's noteworthy quality standards for its annual educational programs.

For S2KM reporting about prior educational conferences sponsored by SSP and other structured settlement and settlement planning associations, see the structured settlement wiki.