by Structured Settlement Watchdog
Structured settlement protection acts are supposed to protect structured settlement annuitants. There are serious questions being asked in litigation in multiple states, one where Florida judges approved 4 transactions from the same 19 year old annuitant over 6 months and in one case, another where a Virginia judge approved 11 in 2 years [for an annuitant with a dependent child ] , that could not possibly have ALL satisfied the best interest test under any reasonable standard. In each of these cases the entire structured settlement was stripped. In each of these transactions, the annuitant did not appear in court and in each of these case there are allegations that the annuitant was coached against seeking independent professional advice.
These case raise serious questions about the viability of the structured settlement secondary market.
While court scraping and forum shopping are important issues of varying severity in need of a solution, lax enforcement of "best interest" is FAR more damaging than court scraping.
Structured settlement brokers and settlement planners have been marketing their core product telling lawyers and annuitants that the structured settlement protection acts mean something. From 2002 on settlement planners began to insist that certain language appear in releases pertaining to Internal Revenue Code Section 5891. The allegations in these cases suggest that where there is lax enforcement of the SSPA it renders the protections meaningless.
What is the "best interest" test?
IRC 5891 (c)(2) Qualified order