Beyond Structured Settlements

University of Texas 2016 SNT Conference

Perhaps less well known nationally than the Stetson Law School Special Needs Trust (SNT) Conference, the annual SNT conference presented by the University of Texas (UT) Law School represents a unique and complementary program that more structured settlement and personal injury settlement planning professionals should consider as an educational priority.

Attended by attorneys, financial advisors, trust officers, government agency representatives and care managers, the 12th Annual UT SNT program not only offered an outstanding faculty and comprehensive resource materials, it also integrated federal and Texas state-specific considerations (laws; regulations; current issues and trends; case examples; strategies; best practices) into a detailed learning mosaic that other national (non-state specific) special needs programs are unable to replicate.

Even for attendees venued outside of Texas, however, this integrated federal/state educational perspective provided a valuable analysis of the challenges and alternatives created by the interaction of the multiple sources of ever-changing special needs laws and regulations which sometimes conflict and often are subject to inconsistent administrative rulings.

Kudos to conference co-chairs, Patricia Sitchler and Renee Lovelace, as well as the entire conference faculty. Given the complicated scope and objectives of the UT SNT program, the resulting synthesis could easily have resulted in confusion. Instead, the 12th annual UT SNT conference served both as an excellent updated guidebook for Texas special needs professionals and as a potential model for other state special needs educational institutions and practitioners.

Topics and Speakers

• How to Make a Special Needs Trust - Craig Reaves
• Maximizing Public Benefits - H. Clyde Farrell and Christina Lesher
• Case Law Update - Rebecca Morgan and Elisa Dillard Rainey
• Medicaid Planning for Kids - Christina Lesher
• Texas Health and Human Services Commission Update - Shari Nichols
• Accessible, Available and Affordable Healthcare Resources - Leah Cohen; Anna Marie Mendez; Tresi Moore Weeks
• Working with SSA and the Trust Reviewer Teams - Pi-Yi Mayo (Moderator); Amanda Flood; Dana Marquez
• SNTs and the New SSA Trust Review Procedures - Neal Winston
• The New Texas Supported Decision-Making Agreement Act - Tresi Moore Weeks and Renee Lovelace
• Texas Legislative Update - Craig Hopper
• SNTs and Tax Planning - Bradley Frigon
• IRAs and SNTs - Renee Lovelace
• The Texas ABLE Act - Stephen Dale and Chris Masey
• Veterans Benefits and SNTs - Hon. Robert Davis
• Getting Families to Spend More Time Planning Ahead - Stephen Dale (Moderator); Matthews Badders; H. Clyde Farrell; Nancy Sosa; Scott Stebler
• Paying Caregivers - Katherine Barr; Scott Stebler
• The Role of SNT Attorneys in Personal Injury Settlement Planning - Patricia Flora Sitchler
• Ethical Issues in SNT Planning - Mary Alice Jackson

S2KM Comments About Selected Issues and Presentations

• UT SNT Conference Resources - As stated above, the conference handout materials (1481 pages of conference-specific legal papers and power points, plus sample forms, drafting tips, and other resources) provide valuable and recommended reference and learning resources. These materials are available for purchase in multiple formats on the UT CLE website.
• SNT Professional Education Resources - The number and quality of educational resources available for special needs professionals continues to increase and improve. In addition to the UT SNT conference, S2KM has attended and reviewed the most recent related conferences sponsored by Stetson, the National Academy of Elder Law Attorneys (NAELA ) and the Academy of Special Needs Planners (ASNP ). ASNP has also sponsored a series of special needs planning webinars. Hal Wright's book: "The Complete Guide to Creating a Special Needs Life Care Plan" represents another valuable resource. Wright, a certified financial planner who focused much of his career on special needs clients, recommends and explains "a comprehensive approach integrating life, resource, financial, and legal planning to ensure a brighter future for a person with a disability."
• Personal Injury Settlement Planning - As S2KM has discussed in numerous blog posts (example), personal injury settlement planning represents a strategic, underdeveloped market for both structured settlement and special needs professionals. UT SNT Conference co-Chair Patricia Sitchler's presentation in Austin (see above) highlighted these opportunities for SNT attorneys. Both the National Structured Settlement Trade Association (NSSTA) and the Society of Settlement Planners (SSP) have taken recent steps to expand their collaboration with special needs attorneys. NSSTA has appointed a Special Needs Trust Task Force to develop strategic relationships with special needs attorneys and also featured Sitchler as a speaker at NSSTA's 2015 Fall Conference. SSP's 2016 Annual Conference (March 10-12 in Tucson, Arizona) will include a joint session and social event with ASNP which recently hosted its own settlement planning webinar series.
• Supported Decision-Making - Effective Sept. 1, 2015,Texas became the first state to recognize supported decision-making agreements as a less restrictive alternative to guardianship. As defined under Texas' new law, a supported decision-making agreement is an alternative to guardianship for an adult with a disability who may need assistance with making decisions regarding daily living but is not so incapacitated that he or she needs a guardianship. As explained by Tresi Moore Weeks and Renee Lovelace in their UT conference presentation (see above) and accompanying paper, the supported decision-making process "is an outgrowth of person-centered planning" which in turn "is based on the belief that people with disabilities are people first, with their own gifts and contributions. A person-centered plan develops a life plan for the future by focusing on the individual’s preferences and capacities. It provides supports to the individual while giving the individual as much self determination and independence as he or she wants and is able to take on." Article 12 of the Convention on the Rights of Persons with Disabilities (CRPD), which was adopted by the U.N. in 2006 and signed (but not yet ratified) by the United States and signed or ratified by 159 other countries, requires states to "take appropriate measures to provide access by persons with disabilities to the support they may require in exercising their legal capacity."
• New SSA Trust Review Procedures - As S2KM has previously reported (see: ASNP 2015 Annual Conference and the Stetson 2015 SNT Conference ), the process by which the Social Security Administration (SSA) reviews SNTs has changed dramatically during the past two years as the result of meetings between SSA representatives and advocates who deal with SNT issues. The UT 2016 SNT Conference featured two complementary video presentations explaining the background, processes, status and impact of these changes: 1) Pi-Yi Mayo moderated a discussion with SSA representatives Amanda Flood and Dana Marquez; 2) Neal Winston explained why the problems with inconsistent, erroneous, or vaguely defined SSA SNT decisions occur; reviewed sources of SSA SNT written policy; discussed current SSA SNT policy trends; detailed the new centralized SSA SNT review procedure; and recommended current best practices for communicating with the SSA about SNTs. Both presentations were supported by excellent papers.
• The Texas ABLE Act - Stephen Dale and Chris Masey reported on the Texas ABLE Act under which eligible individuals with disabilities could start an ABLE account, modeled after current Section 529 savings accounts. For additional ABLE Act background, see this S2KM blog post. Their presentations summarized proposed, related IRS regulations as well as new POMS, issued December 21, 2015, in which the SSA explains ABLE accounts and provides instructions for developing and documenting account balances and distributions. In addition, Dale and Masey identified and addressed multiple practical ABLE-related issues to help attendees educate and advise their special needs clients and communities how best and when to utilize this new disability funding option.

For additional S2KM reporting about structured settlements and government benefit issues, see the structured settlement wiki.

NSSTA 2015 Fall Conference

Although the National Structured Settlement Trade Association (NSSTA) did not promote a specific theme for its 2015 Fall Educational Conference, one of the speakers succinctly captured the program's overall purpose and accomplishment when he described NSSTA's new Industry Growth Initiative as "changing the focus of our future."

Industry Growth Initiative

NSSTA's website description of its Industry Growth Initiative highlights "a significant decline in production since its peak at $6.3 Billion in 2008" and asserts "we do an excellent job protecting our industry" before announcing that "this year we want all NSSTA members to focus their time, energy and resources on new opportunities to expand the use of structured settlements-to grow our industry."

NSSTA President Michael Goodman utilized his Opening Conference Comments in Phoenix (as well as a preconference interview with S2KM) to describe the status and organizational structure of the NSSTA Industry Growth Initiative.

"My first priority as President of NSSTA," Goodman stated, "is to identify growth opportunities for the structured settlement industry. First, we asked all NSSTA members to submit ideas for growth at [email protected]. . Second, I tried to put together a NSSTA Growth Committee consisting of a highly talented cross section of industry leaders with diverse perspectives. Third, the Committee evaluated all of the 28 (to date) NSSTA member growth proposals and selected three for NSSTA Board of Directors approval to develop immediate implementation plans with success metrics."

Goodman introduced the NSSTA Growth Committee members including co-Chairmen William Goodman, Sean Coleman, John McCulloch and John Arendt. Speaking for the Committee, Coleman enthused: "I love our change of focus. Historically, NSSTA has been reactive, dodging bullets. The Growth Initiative redirects our mindset and focus. It encourages us to become proactive. The Growth Committee has already surpassed by highest expectations."

Goodman and the Committee co-Chairmen identified the following three NSSTA Growth Initiatives already selected and approved:

• Rejuvenate Defense Programs (including casualty insurers, commercial insureds and TPAs) - Originally the prime movers for structured settlements, many defense insurers have reduced or completely abandoned their structured settlement programs citing a variety of reasons. Beginning with three target carriers, the Committee plans to analyze the causes, and ultimately revitalize the programs, to create new prototype defense program models. Note: NSSTA recently commissioned surveys of Senior Claims Executives; and front line Claims Professionals which S2KM summarized and evaluated in prior blog posts.
• Amend the Federal Employee Compensation Act (FECA) - FECA, which provides workers compensation like benefits for federal workers, currently does not permit structured settlements. With payouts totally approximately $4.5 billion per year, FECA represent an attractive potential market for structured settlements with administrative cost savings being one justification for a legislative amendment. Based upon preliminary interviews, the Growth Committee believes FECA stakeholders view structured settlements favorably. The Committee is gathering statistical data to support its proposal and building grassroots support.
• Convertible Deferred Lump Sums - As a sales response to "low interest rates", the Growth Committee is proposing a new structured settlement feature. As envisioned, the convertible deferred lump sum would allow a structured settlement recipient to select a future lump sum that would automatically convert on its payment date into a series of predetermined periodic payments payable at whatever annuity rates offered at the time of conversion by the issuing life company. A Canadian broker attending the NSSTA conference stated that at least one Canadian life company already offers this structured settlement product feature. The Committee anticipates whichever annuity provider introduces this product feature in the U.S. will probably also seek an IRS private letter ruling.
• Note: NSSTA's Growth Committee identified a fourth preliminary initiative (Dissipation Study) - to confirm that injury victims squander lump sums. However, this initiative is currently on hold. For background, see this 2009 S2KM review of Jeremy Babener's legal research paper analyzing historic dissipation studies.

Factoring Update

Goodman also addressed the state of the structured settlement industry including a "factoring update". As part of this report, Goodman confirmed that NSSTA and the National Association of Settlement Purchasers (NASP) have agreed to cooperate legislatively in several states to seek the following consumer protection amendments for state structured settlement protection statutes:

• No forum shopping.
• Payee required to attend hearing.
• Stricter application of approval requirements.
• Advanced notice of transfer.
• Required disclosure of prior transfers.

Supporting this cooperative initiative, NSSTA has begun offering its members a new Judicial Education Training Seminar - taught in Phoenix by John McCulloch and Stephen Harris. Goodman also announced he will be a featured speaker at NASP's 2015 Annual Conference next week in Las Vegas - the first serving NSSTA President to do so. Perhaps anticipating his NASP appearance, and cognizant of the recent Washington Post article ("a perfect storm for factoring"), Goodman advised the NSSTA Conference attendees: "Factoring is not a zero sum game. What is bad for them is not always good for us."

Additional Conference Presentations

Many structured settlement participants believe control of the primary structured settlement market, and future market growth, have shifted from the defense to plaintiff attorneys and their injury victim clients. Although NSSTA has been slow to embrace plaintiff-focused personal injury settlement planning, NSSTA's Fall Conference included two presentation featuring plaintiff representatives:

• A Trial Lawyer Panel - moderated by Ryan Garrison with plaintiff attorneys Julio Zapata and Francisco Gutierrez; plus
• An introduction to the National Association of Trial Lawyers Executives (NATLE) by Gayle Bennett, Deputy Director of the New Mexico Trial Lawyers Association.

Both plaintiff presentations emphasized opportunities to expand the market for structured attorney fees. Both plaintiff attorneys expressed a preference for advisors who are "knowledgeable not just about structured settlements but also other investment vehicles."

In addition to the Judicial Education Training session mentioned above, three other NSSTA presentations addressed educational issues and programs:

• Best Practices for Structured Settlement Case Resolution - During her excellent review of structured settlement fundamentals, Betty Gregware expressed serious concern about the general quality of structured settlement documentation and the need to increase competence across the industry.
• Professional Broker Education - Gregware, Melissa Price and Debbie Sink introduced a new educational program NSSTA is developing primarily for individuals who are new to the structured settlement industry. They also provided an administrative overview of "NSSTA University" whereby NSSTA partners with members to secure CE credits for member-sponsored educational seminars for insurance claims departments or law firms.
• MSSC Paper Presentation - Mal Deener moderated a panel featuring Trish Fairhurst, Richard Carroll and other members of the first graduating class of NSSTA's new Masters Structured Settlement Consultant (MSSC) professional designation. Each MSSC graduate is required to submit a paper and these papers will be published on NSSTA's website. NSSTA will offer its next MSSC program beginning April 27, in conjunction with its Certified Structured Settlement Consultant (CSSC) program, at the University of Notre Dame

Separate from, but related to, NSSTA Growth Initiative, NSSTA's Board of Directors has appointed a Special Needs Attorney Task Force to develop strategic relationships with special needs attorney professional associations and to identify collaborative marketing opportunities with special needs attorneys more generally. NSSTA member Carola Davis and Special Needs Alliance attorney Patty Sitchler initiated a NSSTA presentation/discussion in Phoenix which hopefully will continue and expand to the benefit of both professional communities.

A critical factor, both challenge and opportunity, for growing the primary structured settlement market concerns succession planning. What new generation of distributors, or distribution channel(s), or business models, will emerge (and when) to replace and build upon the accomplishments of the pioneering generation (now in their 60s and 70s) who originated the structured settlement market in the late 1970s? NSSTA's Fall Conference featured two presentations addressing these issues:

• Succession Planning - Presenter Jim Early looked at the succession issue primarily from the point of view of the individual producer. Among his observations: "nepotism works in the structured settlement industry" and "a lack of capital has prevented the primary market from bringing in and training new people."
• Diversity Discussion - Angel Viera and Stacy McCall offered a convincing case for promoting greater diversity among new structured settlement professionals as a key component for future growth. Their presentation included and elicited several thought-provoking observations including: 1) "From a demographic perspective, our industry should mirror the people we serve" and 2) "Our industry suffers from a lack of diversity of thinking. Where do we find new voices and perspectives?"

Lifetime payments represent a valuable, optional structured settlement benefit which can be further enhanced from a pricing perspective when rated ages are applicable. Kevin Puckett and Ken Kiefer expounded on these important issues during their presentation about Mortality, Morbidity & Rated Ages.

NSSTA members Susan Clark and Robert Caples introduced Arnie Begler and Scott Henry, representing Pipitone Group, NSSTA's new public relations firm, and together they discussed NSSTA's Communications Program. Because journalists, as well as their readers, frequently confuse the primary and secondary structured settlement markets, Pipitone's "first test" was responding to the aforesaid Washington Post article. Pipitone's stated assignment is "to find the best communications practices and bring them to NSSTA" which will include designing a new NSSTA website. Among NSSTA's priorities, and Pipitone's challenges, will be attempting to reclaim the "structured settlement" brand inclusive of Google searches which currently are dominated by secondary market companies.

NSSTA Executive Director Eric Vaughn concluded NSSTA's Fall Conference with a Government Relations Update - his characteristically insightful and energizing overview of structured settlement legislative and regulatory activities. Among other accomplishments, Vaughn was recently named Vice Chairman of the American Association of People with Disabilities (AAPD).

Other recent NSSTA-related S2KM blog posts:

• Michael Goodman Interview
• NSSTA Marketing Surveys
  • Senior Claim Executives
  • Claim Professionals
  • Plaintiff Attorneys
• NSSTA 2015 Structures 202 Conference
• NSSTA 2015 Annual Conference