by John Darer CLU ChFC MSSC CeFT RSP CLTC
Have you seen "All Payees In One" qualified assignment documents with more than one payee listed on the contract? WE HAVE!
For what is apparently, solely for the sake of convenience, some structured settlement planners are pushing "all payee in one" qualified assignment documents. Who benefits, and why? Let's take a look...
Benefits to the broker or settlement planner
Convenient, "one size fits all" theory
Benefits to the Annuity Issuer
Convenient, Less documents to review
Benefits to Releasor
Fewer documents to sign (Ever been to a real estate closing? If so, you know what I'm talking about)
Benefits to Payee (of an "All Payee In One" single qualified assignment with multiple payees with separate benefits)
What Are the Consequences to each Payee on whose back the benefit of "convenience" fails when an "All Payee in One" Qualified Assignment is used?
- Every Payee knows every other Payee's Business.
- There is no guarantee that the Payees (or their siblings, current and future spouses, parents, children) will get along with each other for the time period of their structured settlement, which could stretch 10, 20, 30 or more years into the future.
- If you have 6 children and a surviving spouse receiving structures and one subsequently decides to sell their payments to a factoring company, the factoring company will require a copy of the qualified assignment and other settlement documents as part of the transaction. This means that the other 6 Payees names are potentially going to be part of a public Court record if and when the structured settlement factoring transaction is approved.
- Some annuity issuers even require an address for each payee in the signature block on the qualified assignment even though such information is not in the settlement agreement. It's a free lead for the factoring company, or "svengali" and has the potential to lead to an unwanted solicitation. Don't be surprised to see the information festering the database of the factoring company for too long.
- The other day I received an email from a very prominent industry colleague with subject line "Factoring mystery". The attorney received an unwanted unsolicited pitch from a factoring company with knowledge of his deals, even though the settlements were private and not Court filed. The colleague speculated that that the only way they could have gotten the info was through a broker selling it (but that's a whole OTHER issue). Perhaps I've uncovered another possibility.
Last updated August 8, 2021