Beyond Structured Settlements

Structured Settlement Surveys - 2

The National Structured Settlement Trade Association (NSSTA), in partnership with CLM Advisors, has recently completed a three-part structured settlement survey project of senior claims executives (Part 1), claims professionals (Part 2) and plaintiff attorneys (Part 3) the results of which provide NSSTA members with marketing tools for discussions with the audiences surveyed.

Complementing NSSTA's surveys, NSSTA member and structured settlement provider Prudential recently published the results of its own 2013 survey of 400 claimants who had entered into a settlement of a physical injury or workers’ compensation claim of at least $100,000 from 2003 to 2013.

Considered together, these four surveys provide valuable insights into how key stakeholders currently view the structured settlement market. They also provide a point of reference for, and comparison with, other structured settlement market surveys several of which have been completed or updated since S2KM published this previous blog post in November 2008.

What follows are brief summaries of prior structured settlement surveys. In subsequent blog posts, S2KM will review and evaluate the most recent NSSTA and Prudential surveys.

• NSSTA 2006: Survey of Plaintiff Attorneys and Structured Settlement Recipients - This NSSTA-sponsored survey was titled: "A Study of the Structured Settlement Process Conducted on behalf of the National Structured Settlement Trade Association" and was directed by Robert E. Hoyt, the Dudley L. Moore, Jr. Chair of Insurance at the Terry College of Business at the University of Georgia. It consisted of attorneys involved in structured settlements (43 telephone surveys) and structured settlement recipients (1275 telephone and Internet surveys). Among the reported results:
  • Only 7% of personal injury settlements between $75,000 and $100,000 include structured settlements; and only 30% of personal injury settlements above $1 million included structured settlements.
  • When asked: "Whom do you prefer to use for purposes of financial planning for your clients?" , surveyed attorneys responded: trust company/department - 30%; Financial planner - 28%; Structured settlement consultant - 23%; No response - 19%.
• American General 2007: Survey about Structured Settlement Public Awareness - Sponsored by AIG American General and conducted by Esearch.com, Inc. in September 2007, this survey included 1000 U.S. participants - 80% had no connection with any personal injury case; 20% had previously been involved directly or indirectly through a family member in a personal injury case. Respondents who had no connection to a personal injury case were asked to read two hypothetical scenarios and answer questions on how they would react.Those with a direct connection to a personal injury case were not only asked to read the hypothetical scenarios, but also to answer questions based upon their real life experience. AIG's conclusion: the structured settlement industry needs to better educate Americans about structured settlements.
• J.G. Wentworth 2008: Survey of Structured Settlement Recipients - The survey consisted of 115 structured settlement recipients who had previously sold payment rights to J.G. Wentworth. The survey questions addressed both primary and secondary market issues, focusing upon the reasons the respondents: 1) first agreed to a structured settlement; and 2) then subsequently sold (transferred) some or all of their structured settlement payment rights. S2KM's prior reporting about the survey's primary market questions, responses plus related S2KM comments appears here. S2KM's prior reporting about the survey's secondary market questions, responses plus related S2KM comments appears here.
• Jeremy Babener 2009: Dissipation Legal Research Paper - Titled "Justifying the Structured Settlement Tax Subsidy: The Use of Lump Sum Settlements," this paper examines and challenges the myth of the squandering injury victim. In it, Babener refutes the existence of any published study supporting the statistic that "90% of lump sum recipients dissipate their recoveries within five years" and identifies 12 existing dissipation studies relevant to structured settlements that reach a contradictory conclusion: injury victims have no greater propensity to dissipate money than non-injury victims.
• Towers Watson 2011: "Update of U.S. Tort Cost Trends" - The 2011 update represents the 15th study of U.S. tort costs, and the most recently published, by Towers Watson. Note: a Tower Watson representative has informed S2KM it has no current plans to publish further updates. The 2011 study reported $264.6 billion of 2010 U.S. tort costs and excluded: 1) no-fault auto insurance; 2) property coverages; 3) workers compensation; 4) certain extraordinary (one time) costs. Tower Watson's 2002 study had previously translated overall tort costs in 2001 into these additional cost categories and percentages: 1) administrative costs - 21%; 2) defense costs - 14%; 3) plaintiff attorneys -19%; 4) economic loss - 22%; and 5) non-economic loss - 24%. Based on the 2011 study and utilizing Tower Watson's 2002 "best estimate" of payout percentages, S2KM has estimated that since 2011 more than $170 billion of United States tort costs annually have represented payments to injury victims and their attorneys.
• Claims & Litigation Management Alliance (CLM) 2011: "National Litigation Management Study" - This survey of litigation management executives analyzed 30 litigation-related service areas including structured settlements. Commissioned by CLM (formerly the Council on Litigation Management ) and conducted by Revere Advisory, it identified structured settlement as the "most penetrated external initiative" among 30 litigation-related service areas analyzed based upon interviews with leading litigation management executives. CLM membership includes: corporations, insurance companies, government agencies, defense attorneys and law firms plus individuals "who participate in litigation and the management thereof (Corporate Counsel; Risk, Claims and Litigation Managers; Adjusters and Service Providers etc.)."
• Daniel Durbin 2013: Survey of Structured Settlement Brokers - Durbin, a former NSSTA President and Senior Structured Settlement Sales Manager with Allstate Life, conducted an informal survey with a group of leading structured settlement brokers to obtain their input and evaluate their interest in representing a potential new structured settlement product provider. Durbin identified himself as part of an investor group of individuals including insurance executives who see underdeveloped opportunities in the structured settlement primary market. Although Durbin has not published the results of his survey, he has presented to several industry groups and stated that the survey showed the interest is high as long as the new firm is financially strong with competitive rates.
• Melissa Evola Price 2002-2015: Quarterly Reports of NSSTA Member Structured Settlement Annuity Provider Sales - Melissa Evola Price's quarterly structured settlement report, selectively distributed to NSSTA members, is now copyrighted by her company, Structured Financial Associates, Inc. (SFA). Price and SFA have granted S2KM permission to publish selected portions of her report on both S2KM's blog ("Beyond Structured Settlements") and the structured settlement wiki. Her reports include historical data from 1975-2001 which is sourced with permission from "Structured Settlements and Periodic Payment Judgments" (S2P2J).  Evola Price most recently reported 2015 first quarter structured settlement annuity premium of $1,332,047,252, an increase of more than $230 million (21%) compared with the 2014 first quarter structured settlement annuity premium of $1,101,839,529.

Structured Settlement Primary Market Growth

The 2015 First Quarter Report of structured settlement annuity provider sales recently compiled and selectively distributed by Melissa Evola Price provided welcome news for the industry.

Structured settlement 2015 first quarter annuity premium of $1,332,047,252 increased by more than $230 million (21%) compared with the 2014 first quarter annuity premium of $1,101,839,529. This 2015 first quarter total is the largest since 2009 when reporting companies produced $1,418,930,180 of structured settlement annuity premium.

Annual structured settlement premium reached its historic 12 month industry record of $6,226,578,725 in 2008 after consistently averaging close to $6 billion annually from 2001-2007. Annual premium totals dropped off sharply from 2009 (following the 2008 financial crisis) thru 2012 before showing modest improvements in 2013 and 2014.

Note: Melissa Evola Price's quarterly structured settlement report is now copyrighted by her company, Structured Financial Associates, Inc. (SFA). Price and SFA have granted S2KM permission to publish selected portions of her report on both S2KM's blog ("Beyond Structured Settlements") and the structured settlement wiki.

The improved 2015 first quarter structured settlement sales appear to result, in significant part, from a purposeful, renewed marketing focus by the National Structured Settlement Trade Association (NSSTA) and its members including:

• Marketing Boot Camp - NSSTA transfigured its 2013 Fall Educational Conference into a "Marketing Boot Camp" - "designed to help every member who attends learn how to increase the number of referrals they get from their clients and how to develop new clients."
• Structures 202 - NSSTA revised its prior Structures 101 educational program (primarily for case managers) in 2015 to attract and assist "Next Generation" structured settlement participants who are new to the market and rapidly replacing the pioneering generation of professionals who created the structured settlement industry in the 1970s and 1980s.
• NSSTA University - During its Fall 2014 Conference, NSSTA announced a new "NSSTA University" service whereby NSSTA will partner with any member to secure CE credits for member-sponsored educational seminars or insurance claims departments or law firms.
• MSSC - 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). NSSTA recognized and honored the most recent graduates of both programs during its 2015 Annual Meeting.
• New Market Surveys - In partnership with CLM Advisors, NSSTA's Marketing Committee commissioned a three part survey project during 2014 to provide its members with valuable marketing tools for discussions with the audiences surveyed. These surveys have now been completed: Part 1 (senior claims executives); Part 2 (claims professionals); Part 3 (plaintiff attorneys).
• Prudential Survey - Complementing NSSTA's new market surveys, NSSTA member and structured settlement provider Prudential recently published the results of its 2013 survey of 400 claimants who had entered into a settlement of a physical injury or workers’ compensation claim of at least $100,000.

In addition to these marketing initiatives, NSSTA finally appears to be encouraging some degree of structured settlement "industry unity".  NSSTA President Michael Goodman highlighted the following recent "NSSTA successes" during NSSTA's 2015 Annual Meeting:

• A strong relationship with the American Association for Justice (AAJ);
• Improved dialogue with the Society of Settlement Planners (SSP);
• Guest educational participation involving SSP and National Association of Settlement Purchasers (NASP) representatives;
• Successful cooperation with NASP to enact revised structured settlement protection legislation in Illinois.

Do the positive 2015 first quarter results anticipate further growth in the structured settlement primary market? And, if so, what resources and strategies will be required?

S2KM will address these questions in subsequent blog posts based in part on the results of the most recent structured settlement market surveys sponsored by NSSTA and Prudential.

For S2KM's most recent structured settlement primary market reports, see:

• Structured Settlements 2014 - Primary Market
• Structured Settlement Update - 2014 Annuity Sales

NSSTA 2014 Fall Educational Conference

Although David Ringler was unable to attend the National Structured Settlement Trade Association (NSSTA) 2014 Fall Educational Conference October 29-30 in La Jolla, California, he had an apparent impact. Ringler, NSSTA's first president, previously re-stated his original vision for NSSTA during NSSTA's 25th anniversary celebration in 2011:

"Although we do need to constantly be on the watch for legislative change, I still believe having 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. I have called it a common “talk table”, although I agree that is not exactly a very elegant term. If we can continue this tradition, there is no problem we cannot overcome."

Many industry participants, including some NSSTA members, have questioned whether NSSTA has lost sight of this original purpose and tradition. 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. As one result, structured settlement industry participants with alternative issues, viewpoints, beliefs and educational interests have founded two other national structured settlement associations: the National Association of Settlement Purchasers (NASP) in 1996 and the Society of Settlement Planners (SSP) in 2000.

NASP and SSP Participation

Perhaps responding to Ringler's clarion call, NSSTA opened its members-only educational program in La Jolla by inviting NASP President Patricia LaBorde and SSP President Neil Johnson to speak.

LaBorde was featured on a Secondary Market Panel, moderated by John McCulloch, which also included Stephen Harris and Patrick Hindert as panelists. McCulloch's questions targeted primary market concerns such as the prevalence of secondary market transfers, consequences of transfer company advertising and secondary market discount rates. The resulting discussion captured the audience's undivided attention and hopefully will result in expanded educational dialogue between NSSTA and NASP to include shared political and business interests.

Johnson and current NSSTA President Kevin Silo jointly addressed "Industry Challenges", a panel discussion moderated by NSSTA President-elect Michael Goodman. Repeating portions of his SSP 2014 keynote speech, Johnson proposed the following solutions for achieving industry unity: 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.

Generational Change and Challenges

NSSTA and the primary structured settlement market face multiple challenges (see below) - perhaps none greater than succession. What new generation of distributors, or distribution channel(s), 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?

In addition to generating more than $140 billion of annuity premium, the legacy of NSSTA's retiring generation includes enactment of the existing structured settlement legislative framework: current IRC sections 104(a)(1) and (2) and 130 plus multiple state periodic payment of judgment statutes and (with NASP) enactment of IRC 5891 and the state protection statutes. More recently, however, NSSTA's aging leadership has focused on defense - with "protect and preserve" its principle mantra.

NSSTA attempted to addressed this generational succession issue at its Fall conference by juxtaposing panels featuring past NSSTA Presidents and "Next Generation" brokers. The impression that emerged: NSSTA and the primary market have reached an historic crossroads - with multiple stakeholders, issues and options, but no clear future direction.

Whatever next generation of NSSTA leaders emerges will face several challenges:

• Stagnant growth - Since achieving $6 billion of annual annuity sales in 2001, structured settlement premium growth has stagnated with 2013 sales totaling $5.1 billion.
• Polarized market(s) - NSSTA's leaders have been unable, and/or unwilling, to unify the structured settlement market(s) around such shared interests as: primary market growth; preservation of existing legislation; and consumer protection - which prioritizes maintaining promised periodic payments.
• Alternative business models - Can alternative structured settlement models (traditional defense vs. emerging plaintiff) continue to co-exist and collaborate?
• Complexity - Structured settlements represent a strategic product within the larger and more complex personal injury settlement planning (settlement planning) market.
• Product features - Will Pacific Life's recent private letter ruling encourage structured settlement annuity providers to expand their product offerings to include "equity-indexed" annuities and "hardship conversions"?
• Competition. Within the settlement planning market, the growth and leadership of other product and service providers has increasingly exceeded the growth and leadership of structured settlement participants.
• Success factors. To expand sales within the evolving settlement planning market, NSSTA's leaders must re-think and re-engineer historical success factors - backgrounds and skill sets; educational programs; business models; product enhancements; sales and marketing strategies.

KNOWLEDGE MANAGEMENT

The settlement planning market is knowledge-intense and increasingly Internet-based. To continue, and increase, their historical success within the evolving settlement planning market, NSSTA and its members must improve their knowledge management capabilities. One preliminary step is to identify and evaluate existing strategic knowledge. NSSTA and its members possess three primary types of strategic knowledge:

• Product knowledge - The "Tax Posse", the ACA summary, and even the Non-traditional Products presentation at NSSTA's Fall conference represent good examples of NSSTA's product knowledge. Perhaps more important, and more valuable, than explicit product knowledge, NSSTA members possess tacit (intuitive, experiential) knowledge of how structured settlements work. In the context of the secondary market, however, NSSTA member knowledge of its own product is arguably much weaker, and, therefore, incomplete and less valuable.
• Relationship knowledge - Much of NSSTA's Fall conference related to, and re-enforced, NSSTA's and NSSTA members' 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; 6) MSA administrators; 7) SSP; and 8) NASP. In settlement planning, as in life more generally, it is not what you know but who you know that counts the most.
• Market knowledge - Compared with other settlement planning market segments, NSSTA (and NASP) appear to have developed and maintained more accurate market metrics including quarterly and annual premium and cases in total and for each member product provider. To further expand structured settlements into the settlement planning market, NSSTA and its members might begin to track additional metrics. For examples: what percentage of structured settlements are utilized to fund MSAs, SNTs and settlement trusts more generally. Which categories of structured settlement recipients are most likely to sell payment rights and why?

MARKETING INITIATIVES

NSSTA conference speakers introduced multiple new marketing initiatives including:

• "NSSTA University" - NSSTA's Debbie Sink announced a new "NSSTA University" service whereby NSSTA will partner with any member to secure CE credits for member-sponsored educational seminars or insurance claims departments or law firms.
• CLM Survey Part II - In partnership with CLM Advisors, NSSTA's Marketing Committee summarized CLM Survey Part II (claims adjustors) of an eventual three part survey project. Part I surveyed claims executives. Part III will survey plaintiff attorneys. These surveys provide NSSTA members with valuable marketing tools for discussions with the audiences surveyed.

TOPICS AND SPEAKERS

• Introduction and Welcome - Eric Vaughn.
• Industry Challenges - Michael Goodman (Moderator), Kevin Silo, Neil Johnson.
• Next Gen Brokers - Louis Masry (Moderator), Kristen Chess, Ryan Garrison, Tony Robinson.
• Financial Issues for People with Disabilities - Sally Greenberg and Mark Perriello.
• AAJ Treasurer Elect - Elise Sanguinetti.
• MSA Professional Administration - Tom Adams (Moderator), Marques Torbert, Joe Anderson.
• Affordable Care Act - Jordan Bossler.
• Past NSSTA Presidents - Moderators (Kevin Silo; Eric Vaughn); Jeff Bowers, Len Blonder, Joe Costello, Mal Deener, Dan Durbin, Randy Dyer, Dan Finn, Patrick Hindert, John Machir, Henry Strong.
• Factoring Panel - John McCulloch (Moderator), Stephen Harris, Patrick Hindert, Patricia LaBorde.
• Non-Traditional Products - Erin Muller (Moderator), John Arendt, Ryan Jandreau, Jeff Reinhold, Chris Shumate, Ravi Vaswani.
• American Insurance Association - Peter Foley.
• CLM Survey Part II - Taylor Smith, Susan Clark, Jeff Livingston.
• Tax Posse - John McCulloch, Timothy O'Driscoll, Tom Ronce.
• NSSTA CE News - Erin Muller and Debbie Sink.

Congratulations to NSSTA and conference chairperson Erin Muller for re-establishing NSSTA's tradition of educational programs featuring speakers with multiple viewpoints on industry issues "regardless of beliefs". David Ringler and other structured settlement pioneers should feel gratified - and hopeful for NSSTA's future success.

For S2KM's reports about prior NSSTA educational conferences, see the structured settlement wiki.

Structured Settlement Metrics - 5

How satisfied with their structured settlements are injury victims (and their attorneys) who have opted for structured settlements instead of, or in addition to, lump sum alternatives?

As part of S2KM's series discussing structured settlement metrics and analytics, this blog post addresses that question by summarizing selected results from three structured settlement surveys related to customer satisfaction:

• NSSTA 2006 Survey - as summarized during both the National Structured Settlement Trade Association (NSSTA) 2007 Winter Meeting and 2007 Annual Meeting;
• AIG 2007 Survey - as reported on the AIG website and summarized during the NSSTA 2008 Annual Meeting.
• J.G. Wentworth 2008 Survey - as reported in a press release on October 29, 2008 and a media report on November 5, 2008.

In prior blog posts, S2KM examined structured settlement "quality" and "performance" metrics and analytics in the context of a 2011 National Litigation Management Study sponsored by the Council on Litigation Management (CLM). That study identified structured settlement as the "most penetrated external initiative" among 30 litigation-related service areas analyzed based upon interviews with leading litigation management executives.

In a subsequent blog post, S2KM will provide commentary and suggest conclusions about customer satisfaction with structured settlements based upon the results of the three surveys.

NSSTA Survey - The National Structured Settlement Trade Association (NSSTA) survey consisted of attorneys involved in structured settlements (43 telephone surveys) and structured settlement recipients (1275 telephone and Internet surveys). Titled: "A Study of the Structured Settlement Process Conducted on behalf of the National Structured Settlement Trade Association", the survey was directed by Robert E. Hoyt, the Dudley L. Moore, Jr. Chair of Insurance at the Terry College of Business at the University of Georgia. Among the results:

• Structured settlement recipients:
  • 65% said they had not heard about structured settlements prior to settlement.
  • Most were uncertain whether a structured settlement consultant was involved with their case.
  • 34% recalled receiving educational information while 75% of this 34% said the information was helpful.
  • 66% first learned about structured settlements from their trial attorney.
  • 75% said they were very happy their settlement included structured settlement annuities.
  • 75% said they would recommend a structured settlement.
• Attorneys involved in structured settlements:
  • 95% said they are proponents of structured settlements.
  • 70% said they retain a structured settlement consultant at least for some cases.
  • When asked: "Whom do you prefer to use for purposes of financial planning for your clients?", the attorneys responded:
    • 30% - Trust company/department.
    • 28% - Financial planner.
    • 23% - Structured settlement consultant.
    • 19% - No response.

AIG Survey - Conducted by Esearch.com, Inc., the AIG survey included 1000 U.S. participants. 80% of the participants had no connection with any personal injury case while 20% had previously been involved directly or indirectly through a family member in a personal injury case. Participants who had no connection to a personal injury case were asked to read two hypothetical scenarios and answer questions on how they would react. Those with a direct connection to a personal injury case were not only asked to read the hypothetical scenarios, but also to answer questions based upon their real life experience.

• In AIG's first survey hypothetical, AIG provided no information about structured settlements. Results:
  • 65% of respondents said they would elect a lump sum of which
  • 49% said they believed they could make their own long term decisions and
  • 26% said the lump sum was more appropriate to pay bills and pay off debt.
• In AIG's second survey hypothetical, AIG provided survey respondents with information about structured settlements - presumably this "AIG Backgrounder" which AIG features on its website. Results: 73% of respondents said they would elect a structured settlement.
• 206 of 1000 participants said they or their family had been involved with a personal injury case. Results for those 206 participants:
  • 86% had elected lump sum.
  • 57% said they were unaware of structured settlements.
  • 64% said their attorneys did not inform them about structured settlements.
  • 57% of those that elected a lump sum said their settlement funds were already depleted.
  • 71% of respondents who said they favored a structured settlement did so "to provide a regimented stream of income designed to cover expenses".

J.G. Wentworth Survey - The J.G. Wentworth survey consisted of 115 participants who had previously sold some or all of their structured settlement payment rights to Wentworth and focused upon the reasons they: 1) agreed to a structured settlement; and 2) subsequently sold (transferred) some or all of their structured settlement payment rights. According to a J.G. Wentworth marketing executive, the survey resulted from recommendations made at the 2008 Structured Settlement Thought Leadership Conference. Relevant questions and results:

How many years ago did you settle your original lawsuit?

• 70.9% - More than 10 years ago.
• 14.5% - 5 to 10 years ago.
• 13.6% - 1 to 5 years ago.
• 0.9% - Past 12 months.

When you settled your original lawsuit, why did you accept payments over time rather than a single lump sum of cash?

• 23.4% of the participating structured settlement recipients said they never were given a lump sum option.
• 38.3% had been minors whose settlements were approved and/or selected by judges and guardians.
• 38.3% of the respondents offered the following reasons for accepting a structured settlement:
  • 23.4% - Payments over time seemed like a better deal.
  • 7.4% - Not sure I could manage a large amount of cash.
  • 6.4% - To pay future medical expenses or special needs.
  • 1.1% - Faster way to settle.

How satisfied are you that you accepted a structured settlement?

• 25.0% - As a minor, a structured settlement was considered the best option.
• 24.1% - Mostly satisfied.
• 21.3% - Neither satisfied nor dissatisfied.
• 18.5% - Completely satisfied.
• 6.5% - Slightly dissatisfied.
• 4.6% - Completely dissatisfied.

Do you wish you and your attorney had negotiated for a single lump sum settlement?

• 31.5% - No.
• 27.8% - As a minor, I was unable to negotiate my settlement terms.
• 20.4% - Maybe.
• 10.2% - Yes.
• 10.2% - I don't know.

When you settled your original lawsuit, how well informed were you about structured settlements?

• 30.5% - Due to my status as a minor, I was not informed.
• 27.6% - Very well informed.
• 24.8% - Not well informed.
• 17.1% - Well informed but still had questions post-settlement.

Why did you sell all or part of your structured settlement?

• 60.2% - Pay bills.
• 8.3% - Start a business.
• 8.3% - Home improvement.
• 5.6% - Pay for education.
• 5.6% - Cash made more sense than waiting.
• 4.6% - Buy a house.

Did selling your structured settlement help solve your financial problem?

• 40.7% - Mostly.
• 32.4% - Yes.
• 21.3% - Only helped a little.
• 5.6% - No, it did not help.

Would you sell payments again?

• 36.3% - Maybe.
• 30.1% - No.
• 18.6% - Yes.
• 8.0% - Probably.
• 7.1% - I have already sold all of my payments.

If you sold only part of your settlement, do you plan to keep the rest of your payments as a structured settlement?

• 42.3% - Yes.
• 35.1% - I don't know.
• 9.0% - No, I plan on selling all of my payments.
• 8.1% - I already sold all of my payments.
• 5.4% - No, I plan on selling some of my payments.

For complete S2KM reporting and commentary about structured settlement metrics and analytics, see the structured settlement wiki.

Business Standards and Practices - 3

This S2KM blog post summarizes the emerging business and professional models that are competing with the traditional structured settlement models. It continues S2KM's series analyzing structured settlement business standards and practices.

• Business Standards and Practices-1 highlights historical events that helped to develop traditional structured settlement business and professional models. 
• Business Standards and Practices-2 addresses two strategic issues:
  • What are the traditional structured settlement business and professional models?
  • What problems have traditional structured settlement models created that have restricted industry growth?
• Subsequent S2KM blog posts will address differences between the new structured settlement business standards and practices and the business standards and practices associated with traditional structured settlement models.

The traditional structured settlement "claim management" business model and "annuity broker" professional model are being challenged by a more comprehensive and customer-centric "settlement planning" model. Settlement planning, sometimes referred to as "special needs settlement planning" or "settlement consulting", proposes a different set of business standards and practices than traditional structured settlements. Although structured settlement "annuity brokers" participate in the settlement planning market, other product and service providers also participate. Individually or collectively, all of these professional participants may be referred to as personal injury or special needs "settlement planners" or alternatively as "settlement consultants".

The Society of Settlement Planners (SSP) has become the preeminent architect of and advocate for the settlement planning business model. In 2008, SSP adopted and published its "Standards of Professional Conduct for Settlement Planners". The Preamble (subtitled: "A Settlement Planner's Responsibilities") to SSP's Standards of Professional Conduct incorporates the following descriptions of settlement planners:

• "A settlement planner is a representative of a person participating in the design, negotiation and implementation of a settlement or satisfaction of a judgment for the benefit of a person claiming a legal entitlement to an award of damages or other compensation."
• "A settlement planner may represent a plaintiff, a defendant, an insurer, a guardian ad litem, an heir of a claimant, an attorney, or another person participating in the settlement process."
• "Settlement planners may provide advice and other services to their clients concerning claim valuation, negotiation strategy, the determination of rated ages based upon impaired life expectancy, life care planning, ..., allocation of proceeds, taxable and non-taxable periodic payments, structured settlements, [Medicaid and Medicare preservation], investments, irrevocable trusts, assessment of a plan's financial risk, and estate liquidity for tax planning.
• "....[T]o the extent permitted by these rules, [settlement planners] may provide advice and assistance to payees in connection with the factoring of a structured settlement plan."
• "Settlement planners may also play other roles ...such as a lawyer representing a claimant or obligor, a financial planner, an annuity broker, or a sales agent for an issuer of an annuity or provider of trust-based investment management products."

Although the settlement planning market encompasses the structured settlement market, it is substantially larger and more complex. Based on market surveys, estimates of the total annual U.S. market for potential personal injury settlement planning products exceed $160 billion (source: Towers, Perrin Annual Updates of U.S. Tort Cost Trends) compared with a current annual primary structured settlement annuity market of less than $6 billion.

Because the settlement planning market is emerging and its definition is complex with multiple professional participants, settlement planning education, certification and business models are still evolving. Settlement planning business models are also subject to change based upon continuing legal, technology and product developments.

Among professional primary market structured settlement participants, both SSP and the National Structured Settlement Trade Association (NSSTA) offer educational programs featuring settlement planning components. SSP's annual educational conference is open to non-SSP members and SSP encourages attendance by non-SSP settlement planners. NSSTA's educational conferences are restricted to NSSTA members and focus more narrowly on structured settlement topics.

Beginning in 2007, SSP has offered the only settlement planning certification program, the Registered Settlement Planner (RSP). NSSTA's Certified Structured Settlement Consultant (CSSC) program includes settlement planning components. Associations composed of other settlement planning professionals, including special needs attorneys, Medicare set-aside professionals, life care planners and structured settlement transfer companies, offer settlement planning and structured settlement presentations as part of their educational programs.

How does the emerging "settlement planning" business model differ from the traditional structured settlement "claim management" model? From a structured settlement perspective, the settlement planning business model is more claimant-controlled and customer-centric and subject to greater supervision than the traditional structured settlement claim management business model. Here are some of the developing characteristics:

• IRC 468B Qualified Settlement Funds represent the standard funding model for complex cases;
• Multiple settlement funding product alternatives exist including structured settlement annuities;
• Funding product selection and court approval are determined by "best interest", "suitability" and/or "prudent man" standards;
• Settlement planners offer insurance and non-insurance products and services, requiring additional licenses, training and credentials, to satisfy legal requirements and to meet competitive qualification standards;
• Structured settlements are increasingly:
  • Integrated with other government benefits;
  • Payable into trusts or custodial accounts which include other financial products; and
  • Construed as a separate asset class when measuring their interactive effects on an integrated, comprehensive settlement plan;
• Personal injury claimants have the right to:
  • Select their own structured settlement and/or settlement planning consultants, agents, brokers and product providers;
  • Full disclosure and written informed consent concerning:
    • Product and service provider compensation, fees and conflicts of interest;
    • Structured settlement laws including case-specific state protection statutes.

For comparable characteristics of the traditional structured settlement business model, see Business Standards and Practices-2.

For S2KM's continuing analysis of structured settlement business standards and practices, see S2KM's structured settlement wiki.

Spencer v. Hartford - 6

Why and when should defendants, and/or their insurance companies and/or their reinsurance companies, ever agree to fund a structured settlement using either a "buy and hold" strategy or an "IRC section 130 qualified assignment" - as opposed to paying cash or using an IRC section 468B Qualified Settlement Fund?

The traditional answer from the traditional structured settlement industry:

• YOU, the defendant, save money using structured settlements - and;
• YOU face no future risk (or almost no future risk) so long as:
• YOU use IRC section 130 qualified assignments.

How does this traditional answer square with the recent Spencer v. Hartford class action lawsuit and proposed class action lawsuit settlement?

What are the most important lessons for defendants, and their insurers and reinsurers, and their attorneys, from the proposed Spencer v. Hartford settlement?

For prior S2KM reporting about Spencer v. Hartford, see S2KM's blog post Spencer v. Hartford - 5.

Structured Settlement Public Policy - 1

The Society of Settlement Planners (SSP) has invited Patrick Hindert, Managing Director of S2KM Limited and The Settlement Services Group (TSSG), to organize a discussion about "Structured Settlement Public Policy" for the SSP 2010 Annual Meeting May 3 in Washington, D.C.

For additional information about the SSP and NSSTA 2010 Annual Meetings, see this prior S2KM post.

S2KM's objectives:

• Improve and grow the structured settlement market.
• Promote public discussions about structured settlement public policy. S2KM has previously published a structured settlement public policy wiki featuring Joseph Dehner, Robert Wood and Jeremy Babener.
• Invite and challenge the best and brightest structured settlement knowledge experts to:
  • Attend the SSP 2010 Annual Meeting; and
  • Participate in a public discussion about structured settlement public policy.

Preliminary public policy questions - also posted on S2KM's public policy wiki.

• What is a structured settlement?
  • Google search
  • wikipedia definition
  • transaction diagram
• What does "public policy" mean generally - and specifically for structured settlements?
• Why is public policy important for structured settlements?
• Who and what defines structured settlement public policy?
• What changes have occurred in structured settlement public policy?
  • Before 1982
  • Between 1982 and 2000
  • Since 2001
• Based upon existing structured settlement public policy, what constitutes best business practices, bad business practices and illegal business practices?
• What are the most important structured settlement public policy issues?
• Does structured settlement public policy support:
  • Single claimant IRC section 468B qualified settlement funds?
  • Court-approved structured settlement factoring transactions pursuant to IRC 5891 and state structured settlement protection statutes?
  • Tax exclusions for non-physical injuries as well as physical?
  • Tax credits rather than the current tax exclusion?
• How many structured settlement recipients pay federal income taxes - or gain any financial advantage from the structured settlement tax exclusion?
• Do personal injury victims have a greater propensity to dissipate their financial resources than non-personal injury victims?
• Or, does public policy actually require and promote dissipation by injury victims and other disabled persons? For example, Medicaid asset requirements and resulting asset "pay down" strategies.
• Should the existence of the secondary market disqualify annuities as a funding option for special needs trusts?
• Does the Deficit Reduction Act of 2005 apply to structured settlement annuities?
• Why should structured settlement annuities cost less than lump sum alternatives to fund Medicare set-aside arrangements (MSAs)?
• How has health care reform changed structured settlement public policy?
• Does public policy support expanded use of the Internet for marketing, communication, education and collaboration? If yes, how does the Internet and Internet public policy impact the future of structured settlements?
• How can SSP members and attendees influence structured settlement public policy?
• How can members of NSSTA, SSP, NASP, NAMSAP and NAELA better identify and promote their collaborative public policy knowledge and shared public policy interests?
• Should the structured settlement industry encourage public policy analysis and promote best business practices in the context of public policy?
• Does public policy analysis and promotion of best business practices strengthen or weaken the structured settlement industry?

For additional S2KM reporting about SSP and NSSTA, see:

• S2KM's blog post titled "SSP and NSSTA 2010 Annual Meetings" and
• S2KM's structured settlement wiki.

Jeremy Babener Interview - 2

Since first meeting Jeremy Babener at the SSP 2009 Annual Meeting, S2KM has reviewed, analyzed and featured his writing about structured settlements. For prior S2KM blog posts about Jeremy Babener and his structured settlement writing, see S2KM's structured settlement public policy wiki.

S2KM published an advanced summary ("Babener Proposes Expanded S2 Tax Subsidy") of Babener's most recent structured settlement article (titled "Expanding the Structured Settlement Tax Exclusion") which is featured in this week's edition of Tax Notes. The article also appears on Babener's website TaxStructuring.com. Babener has granted S2KM the following exclusive interview about his most recent article.

S2KM: Greetings Jeremy. Our first and only prior S2KM interview (Jeremy Babener Interview) was published June 23, 2009 and highlighted your research about dissipation studies. What structured settlement articles have you written since your dissipation paper?

Jeremy Babener: I have written several articles since. The first provided context when the Treasury removed the single-claimant qualified settlement fund issue from their Priority Guidance Plan. The second discussed a Treasury hearing on Section 104(a)(2) regulations focused on the different tax treatment for physical and non-physical damages, as well as a recent proposal to eliminate the distinction by the National Taxpayer Advocate. The third, a longer law journal article, provides the history of the structured settlement and factoring industries, and makes the public policy argument in favor of Treasury regulations for single-claimant qualified settlement funds. This most recent piece introduces the possibility of converting the structured settlement tax exclusion into a tax credit.

S2KM: What reactions have you received to your structured settlement writing?

Jeremy Babener: I have enjoyed receiving feedback from industry practitioners. Many have contacted me with questions, which I am happy to discuss. In terms of recommendations that I have and am making, while I have received a lot of positive responses, the question is whether those with decision-making powers will consider them.

S2KM: Let's talk about your most recent article. What is the title and where and when was it published?

Jeremy Babener: It is titled, "Expanding the Structured Settlement Tax Exclusion," and was published on April 19th in Tax Notes.

S2KM: Who is your target audience and why should they read your most recent article?

Jeremy Babener: The article is aimed at legislators and those interested in affecting structured settlement policy. It is meant to restructure the 1982 legislation that established the current tax exclusion to better accomplish the purpose of the 1982 Congress. Of course, those in the structured settlement industry are the more practical audience. They would economically benefit from the proposal and are therefore the likeliest group to be interested.

S2KM: What is your core message?

Jeremy Babener: My article focuses on who benefits from the structured settlement exclusion. Like all exclusions, it is of little use to those who, even without the exclusion, would incur no taxable income. The article suggests that a uniform refundable tax credit for structured settlements, or a financial supplement to structured settlement recipients with less income, might better accomplish Congress’ purpose of discouraging premature and inappropriate dissipation.

S2KM: What is the difference between an exclusion and a credit?

Jeremy Babener: Let's say that my taxable income is $100,000, and that I have a 50% tax rate. That means that I pay $50,000 in taxes. A $1,000 exclusion reduces my taxable income to $99,000, and thus I pay $49,500 in taxes. As you can see, the $1,000 exclusion was only worth $500 to me. Tax credits, quite differently, are generally "dollar for dollar." This means that a $1,000 tax credit actually reduces my taxes, not my taxable income, by $1,000. Thus, I would pay $49,000 after the tax credit, rather than $49,500 after the tax exclusion. Of course, someone with a lower tax rate, such as 10% will get even less out of a tax exclusion. For them an exclusion would be worth $100, as opposed to $500 for someone with a rate of 50%.

A refundable tax credit provides the value of the tax credit to someone whether or not they have any tax liability. Thus, $100 of tax credit to someone with no tax liability results in a $100 check from the government. A uniform refundable tax credit provides the same value to all, regardless of tax brackets. Thus, everyone might subtract the same $100 tax credit from their tax liability. A person who owes $50,000 in taxes would subsequently owe $49,900. A person who owes nothing in taxes receives a $100 check from the government ($100 in "negative taxes").

S2KM: Who gets the most out of the structured settlement exclusion, and who gets the least?

Jeremy Babener: Those who generate sufficient income after a settlement to place them in the highest tax-bracket get the most out of the exclusion. As illustrated above, the higher one's tax rate is, the more one gets out of an exclusion. Those who have no tax liability do not benefit at all from the exclusion.

S2KM: Recent estimates state that 47 percent of potentially eligible U.S. taxpayers pay no federal income tax. Is that statistic accurate and, if so, how does that statistic impact your proposal?

Jeremy Babener: Yes. The Tax Policy Center found this to be the case. We do not know how many personal injury victims pay no federal income tax, but since injury often makes work difficult, I would guess that the percentage would be even higher. That means that the current tax exclusion may fail to incentivize half or more of those who could choose to structure, providing them with no economic benefit for doing so.

S2KM: Why does it matter that some structured settlement recipients get more out of the exclusion than others?

Jeremy Babener: The purpose of the exclusion is to prevent premature and inappropriate dissipation of lump sum settlements. Unless Congress believes that such dissipation is more likely among plaintiffs earning higher incomes after their settlements, which seems unlikely, the exclusion’s design is not economically efficient.

S2KM: Should we be particularly concerned that potential structured settlement recipients expecting lower incomes have a weaker incentive to structure?

Jeremy Babener: Probably. We do not have proven data on this, but it seems likely that those with lower income are those more likely to dissipate. A low income after settlement might result from a debilitating injury and high injury-related expenses. It would seem that persons in such a situation are more likely to need every last cent of their settlement compensation because they may not be able to make up for dissipation by working more. Thus, they may be the most likely people to end up requiring government assistance as a result of dissipating.

S2KM: How could the exclusion be modified to incentivise potential structured settlement recipients expecting lower incomes?

Jeremy Babener: If Congress wishes to incentivise all potential structured settlement recipients equally, the exclusion could be turned into a uniform refundable tax credit. Such a credit would provide the same amount of value, whether by reducing tax liability or providing a tax refund, to all structured settlement recipients.

S2KM: If those earning a lower income are more likely to dissipate, why should we not just direct the structured settlement subsidy to them?

Jeremy Babener: Congress could do just that. But, there are reasons not to at this time. First of all, we do not have proven evidence on the matter. Economic literature posits that when we lack such evidence, it is most economically efficient to incentivise all equally. Secondly, not everyone knows what they will be making after a settlement. Since the exclusion is meant to encourage a particular decision at the time of settlement, it may be best to guarantee the benefit to all potential structured settlement recipients.

S2KM: Who would win and who would lose if Congress goes with a uniform tax credit?

Jeremy Babener: Clearly, those who could take advantage of the structured settlement exclusion, who could not before, would benefit. The “loser,” if there is one, depends on the structure of the credit. The tax credit would cost the government, just as the current exclusion does. Since the benefit would go to more people under this proposal, Congress would have to decide whether to allow an increase in lost revenue, or decrease the benefit to potential structured settlement recipients. Of course, allowing an increase in lost revenue may save the government from future increases in government assistance payments due to dissipation.

S2KM: What are you hoping to accomplish by writing this article?

Jeremy Babener: The article is not a sophisticated and ready-to-go proposal for Congress. It introduces an idea that I hope the structured settlement industry will take on and make its own. An expansion of the exclusion could benefit plaintiffs (by increasing their settlement value), defendants (by decreasing their settlement cost), brokers (who will earn more commissions), and insurance companies (who will increase annuity sales). I encourage the National Structured Settlements Trade Association (NSSTA) and the Society of Settlement Planners (SSP) to consider the proposal in the future. In fact, even the National Association of Settlement Purchasers (NASP) might weigh in, as the secondary market would be impacted by such a policy change. When the entire structured settlement industry stands to gain, these three associations should work together to further their mutual interests.

S2KM: Given your previous finding that no empirical data has proven that 90% of lump sum plaintiffs dissipate their money in five years, why would you recommend an expansion of a tax exclusion meant to prevent dissipation?

Jeremy Babener: In my research I found that the many citations to statistical findings of dissipation are not substantiated. However, I have also spoken with many in the industry. The anecdotal evidence certainly exists. It is the responsibility and prerogative of Congress to decide how much evidence is needed to legislate, and this was certainly not the first or last time that anecdotal evidence was relied upon for that purpose. My recommendation for a uniform refundable tax credit is meant to better accomplish Congress' goal.

S2KM: As a participant in the upcoming SSP tax panel (May 3 - Washington, D.C.), what tax issues interest you the most about structured settlements and personal injury settlement consulting?

Jeremy Babener: Clearly, I am interested in reactions to this proposal. Among other issues, I am also very interested to discuss the National Taxpayer Advocate's proposal to eliminate the difference in tax treatment between physical and non-physical injury. Currently, the proposal does not take the purpose of the structured settlement exclusion into account. The Advocate's proposal seeks to repeal the 1996 amendment to Section 104(a)(2) limiting the favorable tax treatment of damages to those received on account of "personal physical injury or physical sickness," rather than simply "personal injury or sickness." Unfortunately, the proposal does not seek to repeal the amendment to Section 130 in the Tax Reform Act of 1986 limiting the favorable tax treatment for structured settlement assignment companies to cases "involving physical injury or physical sickness." Thus, while the purpose of the Advocate's proposal is consistent with bringing non-physical damages back into the structured settlement tax-favored fold, it does not.

For prior S2KM blog posts directly or indirectly related to Jeremy Babener, see:

• Babener Proposes Expanded S2 Tax Subsidy
• Legislation to Expand the Structured Settlement Industry
• Jeremy Babener Interview
• SSP 2009 Annual Meeting
• NSSTA 2009 Fall Educational Conference

25 Questions to Evaluate Pooled Trusts

Health care reform (Patient Protection and Affordable Care Act), enacted on March 23, 2010, has re-defined the structured settlement and personal injury settlement consulting marketplace: whether current participants realize it - or (more probably) do not.

Among the strategic consequences of health care reform:

• An estimated 16 million more Medicaid participants - and therefore:
• More special needs trusts;
• More special needs attorneys;
• More structured settlement annuities payable to trustees.

Without focusing specifically on health care reform (not then enacted), the ASNP 2010 Annual Meeting included valuable presentations and handout resources indirectly related to health care reform, structured settlements and settlement planning/consulting.

Among those valuable presentations was Evan J. Krame's analysis titled "Not Very Special Trusts: Fixing Trusts to be Special and Using Pooled Trusts". As part of his ASNP trust analysis, Krame introduced a document he wrote titled "25 Questions to Evaluate Pooled Trusts".

In addition to his legal practice and teaching activities, Krame serves as President of Shared Horizons, Inc. Shared Horizons is trustee of the Wesley Vinner Memorial Trust (a pooled trust) serving people with disabilities in the District of Columbia and Maryland.

Krame has granted permission for S2KM to re-publish his list of 25 Questions here in S2KM blog format.

Trust Structures

• Check the Trust Agreement and Joinder Agreement? What do the documents say? For example, what powers does the trustee have?
• Is the trust approved and monitored by any state agencies?
• Who/what is really serving as the trustee? Is it the non-profit organization that created the trust or is it a third party hired to administer the trust?

Is this Trust Right for You?

• What are the costs of participation? Is there an initiation fee, an annual fee or a termination fee?
• How are the disbursements approved? What is the ease and method of disbursements? Who signs disbursement checks?
• What is the availability of advocacy on behalf of the beneficiary?
• How do they manage public benefit issues?
• How do they monitor the beneficiaries?
• Will the trust own illiquid or uncommon assets such as cars or homes?

Trust Management

• What is the reputation of the non-profit and/or trust management organizations?
• What is the organizational structure? Check on staff, space and activities.
• Who are the officers of the non-profit? What are their skills and background?
• What is the function of the board of the non-profit trustee?
• How long has the trust been in existence? Is there any reason to believe it could fail? How appropriately is the pooled trust compensated?
• How are the trust assets invested? Is there an investment policy in force that is followed? Is there an independent investment adviser? Is there an investment review committee? Is there an allocation model?
• How do they maintain separate shares? Do they uphold the duty to segregate?
• Is there liability and casualty insurance in place?
• How do they meet their duty to inform? Are statements provided to beneficiaries and state agencies (as required)?
• How do they meet their duty to account?
• How do they maintain their records? Are they precise, complete and accurate?
• How do they meet their duty of confidentiality?
• Do they have and/or employ legal counsel?
• Are there termination procedures in place?
• What is the policy as to funds at the death of a beneficiary?
• How do they handle income tax reporting?

Additional S2KM resources about settlement trusts:

• Settlement trusts re-visited
• Settlement trusts
• Single claimant 468B funds
• Selecting a settlement trustee
• Settlement trust due diligence
• Special Needs Trusts X
• Richard Halpern

NAELA's Special Needs Summit - 2

This S2KM blog post strategically analyzes the National Academy of Elder Law Attorneys (NAELA) 2010 Special Needs Summit from a structured settlement perspective. A prior S2KM post summarized the NAELA Special Needs Summit. A subsequent S2KM post will strategically analyze the NAELA Special Needs Summit from the perspective of Internet-based knowledge management.

For related S2KM learning resources, see S2KM's public read-only wikis:

• Structured settlement
• Structured settlement public policy
• Web 2.0 for lawyers

From a structured settlement perspective, the strategic business overlap with special needs attorneys encompasses disabled personal injury victims, their families and trial attorneys. Various knowledge leaders, knowledge networks and communities of practice within this strategic business and public domain utilize alternative terminology to describe their businesses without comparative analysis of the terminology itself. Here are some recommended resources to help special needs attorneys understand this growing legal market segment:

• Settlement law - hardcopy textbooks:
  • Robert W. Wood
    • "Taxation of Damage Awards and Settlement Payments"
    • "Qualified Settlement Funds and 468B"
  • Matt Garretson: "Negotiating and Settling Tort Cases"
  • Stuart Zimring, Rebecca Morgan and Bradley Frigon: "Fundamentals of Special Needs Trusts"
• Structured settlement law - Daniel Hindert, Joseph Dehner and Patrick Hindert: "Structured Settlements and Periodic Payment Judgments"
• Settlement consulting - see S2KM's report and analysis of Joseph DiGangi's presentation at the 2009 NSSTA winter meeting.
• Settlement planning - see S2KM's report about the SSP 2009 conference.
• Special needs settlement planning - see S2KM's report about the ASNP 2009 conference and Tim Nay interview.

S2KM regularly attends and publishes reports summarizing and analyzing national educational conferences sponsored by selected professional associations and universities whose speakers and attendees participate within the strategic business overlap of structured settlements and special needs law:

• National Structured Settlement Trade Association (NSSTA)
• Society of Settlement Planners (SSP)
• National Association of Settlement Purchasers (NASP)
• American Association for Justice (AAJ)
• National Academy of Elder Law Attorneys (NAELA)
• Academy of Special Needs Planners (ASNP)
• National Alliance of Medicare Set-Aside Professionals (NAMSAP)
• Stetson Law School - Special Needs Trust conference

Strategic question: from a structured settlement perspective, what was most important about NAELA's first-ever Special Needs Summit? 

Strategic answer: None of the NAELA speakers or unprograms:

• Attempted to define "special needs law" or any of its ancillary legal and business domains.
• Addressed any of the following structured settlement legal priorities and developments - all of which are strategically important for special needs attorneys:
  • IRC sections 104(a), 130, 468B or 5891;
  • Treasury Hearings for IRC 104(a)(2) regulations
  • Treasury 2009-10 Priority Guidance Plan - dropping single claimant 468B.
  • Spencer v. Hartford class action lawsuit - alleging civil RICO violations.
  • Unauthorized practice of law
  • Dissipation studies
  • Single claimant 468B funds
  • Executive Life of New York
  • Secondary structured settlement annuity market:
    • State structured settlement protection statutes.
    • J.G. Wentworth bankruptcy
    • Fresno County factoring cases
    • Rapid Settlements arbitration model
    • California protection statute amendments - including "best interest" definition

Why should special needs attorneys be interested in structured settlement law? This S2KM structured settlement diagram summarizes a complex legal and financial transaction that requires special needs legal knowledge, documentation and representation and also presents business and career opportunities for special needs attorneys:

• IRC 468B qualified settlement funds
• IRC 130 qualified and non-qualified assignments
• Special needs trusts
• Medicare set-aside arrangements
• Structured settlement transfers

Additional S2KM structured settlement resources for special needs attorneys interested in learning more about structured settlement law:

• Market surveys
• Growing the market
• Structured settlements in 2009
• structured settlement wiki
• structured settlement public policy wiki.

S2KM's next blog post will analyze NAELA's Special Needs Summit from an Internet-based knowledge management perspective.