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

"Expert" Promotes Wrong Structured Settlement Definition for 6 years!

  by Structured Settlement Watchdog®

Despite a lack of a sizeable flock, "wiki man" Patrick Hindert has been a tireless shepherd of the of the knowledge management story to several overlapping industries in our space, most recently the National Academy of Elder Law Attorneys (NAELA). As critical of Hindert as I am at times I was an early adopter of technology, web 1.0 and subquently, Web 2.0 tools. They have made a difference in my business and the capability to deliver information to clients and prospective clients and other stakeholders. 

Wistfully the Hindert "love fest" must now end after a solitary paragraph.

Some people like to throw around geek jargon like "knowledge worker" as a value proposition. But does it really matter if you are "Chief Professor Spaghetti and Meatballs" if you don't have the structured settlement fundamentals correct? With all the talk about Web 2.0 let us not forget one of the timeless technological buzz phrases of the "paleolithic" pre Web 1.0 era, "garbage in equals garbage out".

To wit:

"A structured settlement is a package of financial and/or insurance products, generally including periodic payments, which a claimant accepts to resolve a personal injury claim or to compromise a statutory periodic payment obligation. For purposes of Federal taxation, a structured settlement is defined in IRC Section 5891(c)(1)".  Patrick Hindert November 25, 2004 and cited to by Hindert on March 15, 2010 in a blog post "NAELA Special Needs Summit-3".

FACT:  The structured settlement definition which appears at Internal Revenue Code at IRC 5891(c)(1) is preceded by the words " for the purposes of this section". IRC 5891 expressly has to do with an excise tax imposed on the purchaser of structured settlement payment rights, based on the factoring discount, when certain guidelines are not followed. The section also describes the exceptions to the tax.

Despite this limitation, the use of the definition has been inexplicably expanded by settlement planners, structured settlement brokers, "knowledge workers" and industry commentators such as Patrick Hindert of S2KM and The Settlement Services Group (TSSG)

The Federal taxation of structured settlement payments has its roots in sections of the tax code that long precede the creation of IRC 5891. Qualified structured settlements represent payment of damages excludable under sections 104(a)(1) or 104(a)(2) of the Internal Revenue Code.  IRC 104(a)(1) deals with workers compensation payments and 104(a)(2) deals with damages for physical injury and physical sickness.

With National Financial Literacy Month approaching, this author calls upon S2KM and others to demonstrate superior knowledge management.

 

Chartered Financial Consultant® Program Expanding "To Put More Distance Between It and Other Credentials in The Field"

by John Darer® CLU ChFC MSSC RSP CLTC

As professional credentialing moves to the forefront in consumers vendor selection process, The American College has announced February 2, 2009 that the Chartered Financial Consultant® (ChFC®) designation program, will require a total of nine college-level courses for students starting the program on or after October 1, 2009. This will include all of the elements of the CFP certification plus additional specialized electives including a comprehensive case analysis course.

Said Larry Barton, Ph.D., President and Chief Executive Officer of The American College "ChFC® is the single strongest indication consumers have that a financial planner is well qualified to practice and exemplifies the highest standard of knowledge and trust. The new enhancement to the requirements for this designation continues to put more distance between this mark and other credentials in the field.”

The Chartered Financial Consultant® designation was established as a professional designation in 1982 and is conferred by The American College, a non-profit public educational institution with the highest level of academic accreditation and an 82-year history of raising professionalism in the financial services field. This author, John D. Darer is one of more than 45,000 financial planners have earned this leading credential since its inception.

The ChFC®  takes several years for the typical professional to earn, and it includes adherence to a strict code of ethics and requirements for continuing education throughout an advisor’s career. Each of the nine courses involves 50 hours or more of study time and has a detailed, proctored examination. The comprehensive curriculum covers the full range of financial planning topics, including ethical considerations in creating a financial plan; insurance, tax, retirement and estate planning; investments; and case analysis. It also includes the option for additional study in the areas of macro economic environment, estate planning applications, financial decisions for retirement, and executive compensation.

More on the ChFC® designation

A Message to Settlement Brokers and Settlement Planners

With all due respect to NSSTA and the Executive Program at University of Notre Dame, settlement professionals should not rest on their laurels with just a Certified Structured Settlement Consultant designation. Obtaining the CSSC should not be the end of your academic endeavours. Challenge yourself and others. Elevate your industry.Take the Registered Settlement Planner designation program. Go for the ChFC® designation and/or the CFP®. Even the old hacks! You can do it and if you "can't" or are unwilling then how about mentoring someone else to do it?