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April 27, 2011

Qualified Assignments With Multiple Family Members on Same Form | Why Its May Not Be Such a Good Idea

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) 

NONE   


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 1, 2023

Posted at 02:51 PM in Albany New York Structured Settlements, Attorney Responsibility to Clients in Settlement Planning Process, Bowling Green Kentucky Structured Settlements, Bridgeport Structured Settlements, Bronx New York Structured Settlements, Brooklyn New York Structured Settlements, Buffalo New York Structured Settlements, Chicago Illinois Structured Settlements, Connecticut Settlement Planning, Detroit Michigan Structured Settlements, Hartford CT Structured Settlements, Jacksonville Florida Structured Settlements, Lexington KY Structured Settlements, Long Island NY Structured Settlements, Los Angeles CA Structured Settlements, Maryland Structured Settlements, Missouri Structured Settlements, NC Structured Settlements, New Jersey Structured Settlements, New Orleans Louisiana Structured Settlements, New York Personal Injury, New York Settlement Planning, New York Structured Settlements, Newburgh Structured Settlements, NH structured settlements, NJ Structured Settlements, North Carolina Structured Settlements, NYC Structured Settlements, Oklahoma Structured Settlements, Palm Beach Structured Settlements, Philadelphia PA Structured Settlements, Qualified Assignment, Rhode Island Structured Settlements, Rochester Structured Settlements, Sacramento Structured Settlements, San Francisco Structured Settlements, Santa Monica Structured Settlements, Settlements in Queens County New York, St. Louis Structured Settlements, Structured Settlement Documentation, Structured Settlements, Structured Settlements Arkansas, Structured Settlements Florida, Structured Settlements in Florida, Structured Settlements in Louisiana, Structured Settlements in Maryland, Structured Settlements in Miami Florida area, Structured Settlements in Michigan, White Plains Structured Settlements, WV Structured Settlements |

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  • What Are Structured Settlement Annuities?
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  • 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.
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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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