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June 20, 2006

The Hills WERE Alive With The Sound of Music

Salzburg was the birthplace of Mozart and the setting for the musical and film The Sound of Music. A number of plaintiff structured settlement experts are using a certain legal ethic's opinion of namesake Steven A. Salzburg, Wallace and Beverly Woodbury University Professor of Law at George Washington University as a scare tactic and a commission grab.  Should Salzburg's opinion be "a few of your favorite things"?

It is more often than not the case today that there are structured settlement brokers on both sides of the structured settlement transaction. It is not unlike real estate where there is a buyer's broker and a seller's broker (listing broker). However unlike real estate the structured settlement industry currently lacks a formal framework for splitting of commissions and instead custom and practice dictates agreements between structured settlement brokers which vary from case to case. Opportunists have unfairly tried to mischaracterize such agreements as if there is some "vonTrapp" door. It's up to the structured settlement broker to disclose how he or she is paid and in my experience how I'm compensated is one of the first questions a prospective new client asks and I'm happy to disclose, even provide a structured settlement affidavit.

If a structured settlement annuity is placed as part of the resolution of the case then the structured settlement brokers each share in the commission as licensed insurance agents or brokers, with the commission being paid by the life insurance company issuing the structured settlement annuity.  Note that the commission is paid by the life insurance company issuing the structured settlement annuity and (unless the plaintiff's expert or his or her company is not appointed with the insurance company issuing the structured settlement annuity) not by the defense expert.

Some plaintiff experts are implying that the plaintiff is somehow more enriched by having the plaintiff broker earn all the commission from the placement of a structured settlement annuity. This is simply not the case. Unless the now illegal practice of rebating is made legal and the plaintiff broker is legally permitted to reduce commissions to increase payouts to the plaintiff or pay a portion of his or her commissions to the plaintiff, the plaintiff gains nothing financially if his or her structured settlement broker earns all the commission. That's no greater benefits, no greater annuity savings.

What a plaintiff gets by involving his or her own structured settlement broker, settlement planner or structured settlement consultant is hopefully a qualified navigator through the "short term decisions with life time impact" that accompany the resolution of years of litigation. 

Through its new Broker Relations committee, involving representatives of all of its members, plaintiff and defense, the National Structured Settlement Trade Association ("NSSTA") is seeking to create a framework for the future. I am planning on participating in Chicago in July. If you are listening to a naysayer, ask them if they are participating.

Posted at 11:27 AM in Attorney Responsibility to Clients in Settlement Planning Process, Structured Settlement Brokers, Structured Settlement Compensation, Structured Settlements |

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Guide to Structured Settlements 2025

  • What is a Structured Settlement? What You Need to Know
    Structured settlements and what you need to know about them including a helpful introductory video featuring A.M. Best Client Recommended Structured Settlement Expert and Registered Settlement Planner John Darer of 4structures.com LLC
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  • Rated Ages and Structured Settlement Cost
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  • Treasury Funded Structured Settlements
    Treasury Funded Structured Settlements are a settlement option for the most conservative using the OTHER permissible qualified funding asset under IRC 130(d), United States Treasury Bonds in addition to, or instead of, structured settlement annuities. Treasury Funded Structured Settlements can also be used to fund installment sales, also known as structured sales and other non qualified structured settlements.
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  • Structured Settlement Payments | Types of Structured Settlements 2025
    In 2025, you can structure your settlement payments in various ways. A structured settlement allows for multiple payment types within one agreement. You can tailor and merge different structured settlement payments to suit your individual needs, either alone or alongside other financial instruments. If desired, diversify your structured settlement by utilizing multiple annuity issuers, treasury-funded structured settlements, index-linked structured settlement payments, and market-based structured options.
  • Structured Attorney Fees for Tax Deferral for Attorney Contingency Fees
    Structured attorney fees offer a financial strategy that provides a unique method for deferring taxes for attorneys and their firms. Attorneys can structure or defer their legal fees independently of whether the plaintiff structures their settlement. There are various ways to structure attorney fees, including capped or uncapped index-linked structured settlement annuities with payments adjusted according to the S&P 500 or another index's positive changes. Trial lawyers might also opt for a special deferred payment/compensation arrangement if they seek market-based returns without a cap. As the year-end approaches, consider adding structured attorney fee specialist John Darer® to your settlement planning team for 2025.
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  • Structured Settlement Quote Lock-Ins | What You Need To Know
    What does a Structured Settlement Lock-In Mean? How do plaintiffs, defendants and insurers benefit from a structured settlement quote lock in when finalizing a settlement? How does the defendant/insurer/court benefit from using a structured settlement lock-in? Where to be careful when using structured settlement lock ins.
  • What Are Structured Settlement Annuities?
    Structured settlement annuities are annuities that can provide one or more customized annuity payment streams in a single contract. Read about structured settlement annuities here.
  • History of Structured Settlements
    Tracing the roots of structured settlements history from 1918, when Congress exempted damages for personal injury or sickness from income tax, to the establishment of structured settlements as a core personal injury settlement planning tool to the present day.
  • What Are Market Based Structured Settlements?
    Market based structured settlements are an alternative or supplementary structured settlement solution for the plaintiff, attorney or law firm that: 1. Can afford to take some market risk 2. Have discretionary settlement dollars. Claimants and attorneys alike may find that market-based structured settlements provide the opportunity to receive tax-free income, or tax-deferred income, while enjoying growth potential.
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Qualified Settlement Funds

  • What is a Qualified Settlement Fund?
    Qualified Settlement Funds | What You Need to Know
  • Firmwide Qualified Settlement Funds Debunked
    Firmwide qualified settlement funds have been heavily promoted to trial lawyers, but have been debunked in a detailed analysis in a July 2022 legal opinion a tax partner at the law firm of Faegre Drinker Biddle & Reath, LLP. Trial lawyers and firms who have established Firmwide QSFs or coinsidering establishing a Firmwide QSF should read the analysis as part of their evaluation.

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Structured Settlement Best Practices Corner

  • New York Insurance Advertising law requires the full name of the Insurer to be listed along with the city and state of the principal office. Stating that you represent these fine companies using Insurance company logos without the preceding information are also illegal
  • When it comes to settlement documents it is the ultimate responsibility of the lawyers or claims adjusters who receive input concerning the structured settlement aspects of the documents to actually read the entire document, exercise independent thought and advise their clients properly
  • Be aware that financial advisors use of testimonials is prohibited or restricted
  • Most states require that Testimonials represent the CURRENT opinion of the person who made the testimonial. Be prepared to back it up.
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Why Take a Structured Settlement?

  • A structured settlement offers guaranteed financial security to personal injury victims, wrongful death survivors and their families. A structured settlement involves a customized stream of payments, provides long-term stable tax-free income, for a period of years or a lifetime. Unlike other income annuities. a structured settlement annuity can have multiple payment streams to address multiple needs in a single contract.

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