by Structured Settlement Watchdog®
Adler's Insurance Agency of Spring Valley New York is pushing structured settlement derivatives (recycled structured settlements0 to settling personal injury victims with ignorant deceptive information. Adler attempts to pass off structured settlement derivatives as having the same tax status as structured settlements paid as compensation for damages to the personal injury victim.
Jacob Adler says this:
"In a personal injury case, there's usually no tax obligation, and the same should hold true when you are claiming your compensation by buying out someone else's structured settlement instead of setting up your own.
You should not have to pay tax on your future payments received from the structured settlement plan that you have taken over"
This is my complaint about Adler's Insurance Agency's advice about structured settlements?
- A structured settlement is created as part of a compromise, or "meeting of the minds" between a plaintiff or claimant and a defendant or respondent.
- There is a tax obligation. According to the Sixteenth Amendment of the United States Constitution, "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration', but there is a specific exemption for damages on account of personal physical injury, physical sickness, workers compensation or wrongful death are income tax free as set forth in IRC 104. Those elements of damages in personal injury cases that do not fall with in the IRC 104 exemption are not tax free. For example the amounts allocated to punitive damages, pre-judgment interest or post-judgment interest are taxable.
- The terms of the structured settlement, particularly the future periodic payment obligation must be set forth in the settlement agreement and release and the qualified assignment agreement.
- A structured settlement derivative such that Adler is attempt to hock to New York personal injury victims is not a "qualified funding asset' as is defined under IRC 130(d), which, for purposes of that section is defined as "any annuity contract issued by a company licensed to do business as an insurance company under the laws of any State, or any obligation of the United States, if—
(1)such annuity contract or obligation is used by the assignee to fund periodic payments under any qualified assignment,(2)the periods of the payments under the annuity contract or obligation are reasonably related to the periodic payments under the qualified assignment, and the amount of any such payment under the contract or obligation does not exceed the periodic payment to which it relates,(3)such annuity contract or obligation is designated by the taxpayer (in such manner as the Secretary shall by regulations prescribe) as being taken into account under this section with respect to such qualified assignment, and(4)such annuity contract or obligation is purchased by the taxpayer not more than 60 days before the date of the qualified assignment and not later than 60 days after the date of such assignment.According to noted structured settlement authority Patrick J. Hindert, structured settlement payment rights are not an annuity and they are not a structured settlement. As licensed insurance producer, Jacob Adler would be expected to know what an annuity is.
- Adler fails to mention the origination risk associated with structured settlement investments purchased from others.
- Adler fails to mention that structured settlement derivatives generally do not have the same statutory protection associated with structured settlements that are part of the consideration for settlement of the personal injury victim's case and funded with an annuity as a qualified funding asset.
Not withstanding what is inaccurate, Adler's advice is jaundiced by the fact that he makes his money on how much he can discount future payments of other injury victims. He takes a certain amount of vig and sells the remaining vig to investors.
Adler's Insurance Agency is the same company that tastelessly shamed black amputee burn victim Terrence Taylor whose claims against several structured settlement buyers, buyers in the same business as Adler, made the front page of the Washington Post and fomented change in Virginia's structured settlement protection laws. Adler posted an image of a burn victim whose head was charred with tears flowing, an utterly disgraceful act of bad judgment and an embarrassment to other Jews, given The Holocaust. Fortunately Adler removed the disgraceful image sometime after I posted about it earlier in 2016.