Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews

Annuitant "Forum Shopping" For Independent Professional Advice Part 2

From an anonymous source in response to yesterday's post:

"John, The truth to this matter was that the annuitant had a list of questions for the attorney to answer. The attorney didn't answer any questions asked by the annuitant and just sent over some crap that took 3 minutes to complete. The annuitant is in the process of filing a complaint with the California Bar Association against this attorney. The annuitant is in her early 20's and is using the money to go back to school. She explained to the attorney that she is unable to get financial aid because of her age, family status, and other reasons. Background: In order to obtain financial aid an individual has to be over 24 or needs a parent to co-sign on the financial aid. This was explained along with several other important facts to the attorney when the IPA was requested. Not only did the attorney not pay any attention to what was written to him, he provided stock responses that would never solve her financial issues. He told her to go get a student loan which was impossible to do so. When the annuitant received the IPA from the attorney, she had questions about his remarks which went unanswered and when he did answer he provided sarcastic responses to her situation. BTW, at the time this article was written the both attorney's had already been paid".

Note: The attorney in question call who contacted me yesterday claimed he had not been paid.

 

Annuitant "Forum Shopping" For Independent Professional Advice in Structured Settlement Cash Outs?

by Structured Settlement Watchdog

A California attorney who dispenses independent financial advice to annuitants considering selling structured settlement payments to raise cash called me today. Apparently an annuitant didn't like the fact that his "independent financial advice" was not to sell ("was a bad deal"), so the annuitant sought other "independent financial advice" until they heard what they wanted to hear.

To top it off the factoring company attempted to stiff the attorney providing the "independent financial advice"

It's nice when a statute has teeth in it!

Reference

Here's the relevant section of the California Insurance Code.

California Insurance Code Section Section 10139.5 concerning structured settlement transfers (structured settlement factoring transactions):

(d) All court costs and filing fees shall be paid by the transferee.

(e) No later than the time of filing the petition for court approval, the transferee shall advise the payee of the payee's right to seek independent counsel and financial advice in connection with the transferee's petition for court approval of the transfer agreement, and shall further advise the payee that if the payee retains counsel, a licensed certified public accountant, or a licensed actuary in connection with a petition for an order approving the transfer agreement, that the transferee shall pay the fees of the payee's counsel, accountant, or actuary, regardless of whether the transfer agreement is approved, and regardless of whether the attorney, accountant, or actuary files any document or appears at the hearing on the application for transfer, in an aggregate amount not to exceed one thousand five hundred dollars ($1,500). The transferee's accountant, counsel, or actuary may not advise the payee.

(f) The court shall retain continuing jurisdiction to interpret and monitor the implementation of the transfer agreement as justice requires.

 

Fresno Tomahawk Chop Suey for JG Wentworth

by Structured Settlement Watchdog

Recent Appellate decisions in the Tomahawk and Ramos cases in Fresno County California represent a victory of sorts for J.G. Wentworth, in that California is not sinking into the sea as feared.

Patrick Hindert ruins his own commentary on the subject in his presentation of "The Bigger Picture"

Hindert's "Bigger Picture"

• Final results for the Fresno County factoring cases are still to be determined. TRUE
• The primary and secondary structured settlement markets both face unprecedented challenges. TRUE
• Primary market challenges:
  
  • IRC section 468B Qualified Settlement Funds (QSFs);
  • The secondary market defined by IRC section 5891 and the state protection statutes;
  • Successfully integrating structured settlement laws, processes and documentation with Social Security, Medicare and Medicaid;
  • Surviving the current financial crisis without annuity provider insolvencies and/or payment defaults.
  Comments
• Hindert continues to try and milk IRC 5891 like a growing child unwilling to let go of its mother's teat when there's no more milk. The words "secondary market" do not appear anywhere in the text of Internal Revenue Code Section 5891. "The secondary market" is not defined by IRC 5891. The secondary market is merely "defined" in the "imagination" of the fabricators of the term and their ability to convince others  that this term is appropriate to describe the generally unlicensed cohort of companies and individuals that populate this "market". 
• QSF's are not a challenge to the "primary market". Ultimately responsible practioners will use the settlement tool responsibly as opposed to the universal elixir that Hindert suggests in prior posts.
• The latter two points are valid.
• Further Comments
  • Amid these challenges, Hindert opines that "the Tomahawk and Ramos cases represent important and timely industry victories".  Why are Tomahawk and Ramos important and timely victories for the structured settlement industry?
  • These are factoring industry victories, not structured settlement industry victories. Yet despite the result of the appeals it is clear that the lower Courts in the Fresno cases had some issues with the behavior of J.G. Wentworth/Henderson. That's a gauge of common feeling. Just because one California Superior Court judge cannot overturn another California Superior Court judge's decision, it DOES NOT mean that the same judge cannot rule against JG Wentworth/Henderson before their own Court where there hasn't been another decision.
  • Why no discussion of fraudulent cash now advertising?

For the factoring groupies now firing their Kalashnikovs and AK-47s in the air  I'll leave you with this courtesy of one of our legal resources:

"[A] court may set aside a void order at any time. An appeal will not prevent the court from at any time lopping off what has been termed a dead limb on the judicial tree -- a void order."  Lovret v. Seyfarth (1972) 22 Cal. App. 3d 841, 854.  "It is the settled law of California that a judgment or order which is void on its face, because its infirmity is determinable from an inspection of the judgment roll or the record, may be set aside on motion at any time after its entry by the court=2 0which rendered the judgment or made the order."  (Id.)

“Such a void order may be set aside on the court's motion and by a judge, other than the one who made it.”  Andrisani v. Saugus Colony (1992) 8 Cal. App. 4th 517, 523

 

 

 

 

John Darer is the first Registered Settlement Planner in USA.

John Darer, CLU ChFC CSSC RSP, of 4structures.com, LLC was the first person in the United States to earn the Registered Settlement Planner professional designation.

The Registered Settlement Planner Program (RSP) is a product of collaboration between the Registry of Settlement Planners Board (RSP Board) and the Settlement Planning Education Center(updated). The coursework is rigorous and compares to graduate-level work. It is designed for people who have made a serious commitment to the field of comprehensive settlement planning. The program consists of two courses, each of which must be completed within a year of registration. Successful completion of these courses is required to meet education requirement of the RSP designation. In addition, each candidate must write a comprehensive settlement plan incorporating what they have learned and have that pass the RSP Board and subscribe to the RSP code of ethics.

The course description found on the Settlement Planning Education Center website states that upon completion of the course candidates should be able to:

• Demonstrate a mastery of the legal environment as it relates to planning for the needs of personal injury victims and their families.
• Demonstrate a mastery of the financial planning environment as it relates to planning for the needs of personal injury victims and their families.
• Demonstrate an understanding of the entire settlement planning process from defining the scope of the engagement to creating a settlement plan.
• Demonstrate an understanding of the role of dissipation risk in a settlement plan.
• Acquire knowledge of the ethical issues and practice standards faced by settlement planners.
• Acquire the ability to practice in the area of settlement planning without supervision.
• Develop a thorough understanding of the tax issues faced in settlement planning.
• Prepare and present a written comprehensive settlement plan for a catastrophically injured client.

The goals of the Registry are:

1. Ensuring that settlement planners provide competent timely advice to clients
2. Provide attorneys with assurance that their selected settlement adviser is competent and abides by a code of ethics
3. Provide a measure of accountability to settlement planning practitioners
4. Set a standard of practice to enable clients and attorneys to know what to expect from a relationship with a settlement planner.

This author is proud to be a Registered Settlement Planner and appreciates the good-natured competition from other candidates as motivation to be the first Registered Settlement Planner (RSP) in the country. It's never easy when you are running a busy practice, or have family or other personal obligations, but structured settlement brokers and settlement planners are encouraged to commit the time and effort to help elevate the profession.

Previous posts on the Registered Settlement Planner program, overlapping disciplines and professional credentials:

Registered Settlement Planner Program View From the Middle February 4, 2008
"Convergence" vs "The Quarterback" February 11, 2008
Professional Designations: SFSP Publishes White Paper  May 8, 2008

321 Henderson Under Review By Standard & Poors... A Side Issue Highlights Marketplace Identity Confusion

by Structured Settlement Watchdog

Standard and Poors announced October 7, 2008 that it was "reviewing information pertaining to recent orders of the California Superior Court in Fresno County California to determine the potential impact on structured settlement transactions (sic)".

The review by Standard and Poors is and of itself significant  BUT the side issue of market place confusion caused by entities (or individuals) such as 321 Henderson and other NASP members and others (such as NSSTA member Patrick Hindert's "fantasy" structured settlements 3.0), that ultimately leads a rating agency like S&P to mischaracterize the 321 Henderson transactions as "structured settlement transactions" AND is evidence of how widespread the branding problems are for the structured settlement industry.

321 Henderson is well known as one of the JG Wentworth companies. The Fresno Rulings refer to cases in which the court found that various structured settlement factoring companies  (S&P mischaracterizes as structured settlement companies) failed to comply with the California Structured Settlement Protection Act and questioned the validity of numerous previously approved  court -approved assignments of structured settlements to these companies.  Please note that the "assignments" in the S&P report refer to "assignment of periodic payment rights" NOT "qualified assignments". The Fresno Rulings are being appealed.

"Cash Now Pusher" 321 Henderson purchases structured settlement payment rights from tort victims at a discount and then packages them together through securitizations and sells those to investors. These are what S&P is rating. The potentially finanacially devastating implication to investors buying securitizations composed of transactions later deemed to be invalid or illegal needs no further explanation.

S&P is seeking:

1.  The known exposure concentrations of outstanding receivables that originated out of Califiornia and Fresno County; and
2.  The historic performnace details of these receivables as of the most recent determination date.

S&P Reviewing Structured Settlement Transactions (sic) After Fresno Superior Court Rulings (click title to access)

With respect to the side issue here are some definitions of key terms that were mischaracterized by S&P in its October 7, 2008 report:

Structured Settlement Company
A company that engages in the marketing and placement of new structured settlement annuities, which are regulated insurance products. Included in the definition of a structured settlement company are companies that have employees or, who have independent licensed life insurance agents and brokers, whose primary business is to place structured settlements. There even once was a structured settlement annuity brokerage firm called "The Structured Settlement Company". The term "structured settlement company" is sometimes used to refer to certain life insurance companies who manufacture or issue new structured settlement annuities. Some settlement transfer companies, settlement purchasers or "cash now" companies, have tried to favorably position themselves by incorrectly using this term. However make no mistake, none of them can truly make the claim that they are a "structured settlement company."

Structured Settlement Factoring Company:

A company that engages in the purchase of the rights to receive future structured settlement payments. A transaction completed by such companies is known under the Internal Revenue Code Section 5891 as a 'structured settlement factoring transaction". Sometimes referred to as a "secondary market company" "settlement purchaser" , "cash now company", "cash flow purchaser", "transfer company" "factoring company" or more recently by the slang "financial crack dealer". Sometimes mislabeled in advertising by such settlement purchasers as a "structured settlement company". Don't be confused!

Structured Settlement Factoring Transaction
Describes a process, defined at IRC 5891(c)(3)(A), which results in the transfer of structured settlement payment rights for a discounted amount of cash. Don't believe the marketing hype! A structured settlement factoring transaction IS NOT a structured settlement transaction.

Structured Settlement Transaction
Describes the transaction embodied in the process of  how structurred settlements work, which results in a structured settlement. Part of a structured settlement transaction involves the placement of a structured settlement annuity contract or alternative periodic payment funding mechanism described under IRC 130(d).