Some good natured ribbing is due my pals at Structured Annuities, Inc., which on its website apparently places greater importance on posting pictures of a 2007 event it organized to kill birds like these than keeping their website up to date. One can hardly contain oneself observing that. the company even claims a 2003 copyright on all its web pages, including the one about its 2007 Dove Hunt!
This is not a diatribe against the right to bear arms (and Lord knows these critters have roughed up my geraniums every Spring), but rather a valid question of the level of priority that Structured Annuties, Inc. places on attention to detail in an industry where attention to detail is essential.
Structured Annuities, Inc. still uses an outdated 11 year old comparison copied from a Hartford Life marketing piece comparing structured settlements to Certificates of Deposit (CDs) which now incorrectly states that the FDIC limit is $100,000. Hartford Life no longer writes structured settlements and the outdated comparison has not been authorized sales material for some time.. Be that as it may, as part of the solution to the financial crisis FDIC limits were temporarily increased to $250,000 in 2008. The increase was subsequently extended to December 31, 2013. It will revert to $100,000 on January 1, 2014 absent any changes in the interim. Click for FDIC fact sheet
With respect to the advantages of structured settlement to the claimant, Structured Annuities, Inc. simply demonstrates to the reader ignorance of the law by saying::
"Substantial tax savings. Annuity income payments from a personal injury settlement are totally tax free. (H.R. 5470)"
Of course this is copyrighted to 2003!
1. The H.R. notation is simply a number assigned to a new piece of legislation when it is introduced. Being introduced does not mean it has become law. Click for details of how a bill becomes law and/or watch the video be low "How a Bill Becomes Law"
H.R. 5470 - To amend the Communications Act of 1934 to require the carriage of all local television signals by satellite carriers in all local markets.(introduced February 14, 2008)
H.R. 5740 - To provide for the opposition of the United States to the provision of any
resources or assistance by the International Monetary Fund to the Palestinian
Authority until the Secretary of State certifies that Israel and
the Palestinian Authority have signed an agreement on borders and
security arrangements for Israel and a Palestinian state. (106th Congress, 2d Session)
H.R. 5470 Periodic Payment Settlement Taxes Act of 1982 "To amend the Internal Revenue Code of 1954 with respect to the tax treatment of periodic payments for damages received on account of personal injury of sickness" (97th Congress, 2d Session). Note that the Congressional record refers to a conference requested by the Senate. Eventually became Public Law 97-973 effective January 14, 1983.
3. Neither the 97th Congress version of H.R. 5470, nor IRC 104(a)(2) specify that "annuity income payments from a personal injury settlement are totally tax free".The exclusion under the tax law refers to the tax treatment of the damages not the annuity payments. Structured settlements may be funded with structured annuities OR United States treasury obligations.
4. By 2003, the Internal Revenue Code of 1954 had been superseded by The Internal Revenue Code of 1986 for over 15 years!
Structured Annuities, Inc. states: "Under the current Internal Revenue Code Section 104(a)(2), it does not matter for purposes of exclusion whether the payments compensate the person for past and/or future lost income, medical needs, or pain and suffering. No payments received for these elements of damages need be claimed as income. This is currently true for personal injury tort cases involving personal physical injury or physical sickness.
On the other hand the IRC 104(a) states explicitly:
"IRC104(a) In general
SAI states that another advantage of structured settlements is "Protection from unscrupulous outsiders because annuities cannot be pledged, assigned, encumbered or transferred to other parties".
The rights to structured settlements funded with annuities can in fact be transferred. To wit, what does Texas based Settlement Capital do? How about J.G. Wentworth? They've been doing that since before 2003, when Structured Annuities, Inc. dates its copyright and they're still doing it today. Of course the structured settlement protection acts in most states require Court approval prior to a transfer. See Texas Civil Practice and Remedies Code Chapter 141 a/k/a the Texas Structured Settlement Protection Act, effective September 1, 2001
One of the popcorn popping moments of apparent fantasy on the Structured Annuities, Inc. website is the web page where the link from its home pages is entitled "Representative Verdicts and Settlements". Is Structured Annuities, Inc. representing that THEY actually obtained these verdicts and settlements for plaintiffs, without assistance from their "Dove hunting companions" (e.g. attorneys)? Or, did they simply write a structured annuity as part of the settlement? If they actually wrote a $100MM annuity in an auto accident then take a bow! But if they're simply "doing a Johnny Bair", where the level of braggadocio means talking about "exposures" that have no relation to the size of annuity placed, I'm afraid it's rotten tomato time! One can only speculate because SAI offers no commentary, but one thing appears to be for sure is that nobody at SAI is a lawyer.
CONCLUSION: "Kill Zone" or "Calzone"?"
All is obviously not "lovey dovey" at Structured Annuities, Inc. Frankly it it were me I'd be seeking to update my website ASAP, and thereafter on a more regular basis.
The assumption from first impression is that some web surfers seeking "structured settlement" can draw is "if you want to kill cute little birds and drink beers with dudes from Fort Worth who don't care about attention to detail, call Structured Annuities, Inc. On the other hand if you want attention to detail and not into killing cute little birds then move on. It's simply Kill Zone vs Calzone!
All comments "inspired" by "revelations" on Structured Annuities, Inc. website as of January 9, 2010 1255pm EST
Post script March 2011
Sometime after this post was originally published, the SAI website was redone without the items mentioned in this post. Sometime after that, in March 2011, Don Weeks and I had dinner in Fort Worth to discuss several cases we were working on together. We had a great experience working together professionally. We spent some time speaking at dinner about dove hunting and shooting. He was gracious to wait until dessert before bringing up this ribbing!