by John Darer CLU ChFC MSSC RSP CLTC
Finally another structured settlement industry commentator has spoken out about single claimant qualified settlement fund abuse.
For years 4structures.com LLC has admonished plaintiff attorneys on its website:
"Plaintiff attorneys should be cautious about using a Qualified Settlement Fund when their settlement planner is promoting it on the basis of "full market access" to structured annuity companies. Exactly the opposite is now true when your case involves a single claimant, In such circumstances the limitations to your client on a large case might mean that the client is not able to meet an annuity diversification objective. This could reflect poorly on the plaintiff attorney. Who needs that?"
Moreover, I began blogging about the potential abuse May 16, 2006!
San Francisco tax attorney Robert Wood was dismissive of single claimant qualified settlement funds in his text "Qualified Settlement Funds and Section 468B" which was published in January 2009.
Now Scottsdale, Arizona based settlement Mark Wahlstrom, who is also Chairman of Sequence Media, states in an April 29, 2013 blog " Single Claimant Qualified Settlement Funds (QSF), Fools Gold for Plaintiff Settlement Planners":
"However, the answer... should not be the careless and casual use of the IRC 468B qualified settlement fund process so as to add additional expense, process and potential IRS audit scrutiny to the settlement procedure simply so they don't have to split a commission with a defense broker" (emphasis ours) and
"However, the result of this over reach by plaintiff brokers on single claimant cases has now led to a situation where there are no life insurance companies that will underwrite a structure on a single claimant case (i.e. take a qualified or non qualified assignment from a single claimant qualified settlement fund) , forcing structured settlement brokers and settlement planners to look at alternative products or approaches, or to go back to their clients and explain how their time and funds on setting up a QSF were wasted"