Clients choosing cash settlements assume the risks associated with their investments during both stable and volatile economic times. Clients requiring lifetime care and support usually do not have the luxury of being able to weather market ups and downs and fluctuating incomes, especially when unforeseen medical emergencies are part of life.
Structuring attorney fees is increasingly becoming part of a law firm or sole practitioner’s financial planning strategy. Not every fee is eligible and certain initial steps must be taken so the fee qualifies for its preferred tax status. Patrick Farber, a structured settlements broker at Ringler Associates in Southern California, talked with Mark Simurda, a CPA and tax partner with Lesley, Thomas, Schwarz & Postma, Inc., in Newport Beach about structuring settlement fees.
Patrick Farber Structured Settlements will be sponsoring the reception at the 2010 Tribute to Champions of Justice Dinner, Friday, October 1 at the Beverly Hills Hotel. Honored that evening will be Samuel A. "Skip" Keesal, Jr., founding member of Keesal, Young & Logan and Brian Panish, partner with Panish Shea & Boyle.
After passage by the California State Assembly and Senate, California Gov. Arnold Schwarzenegger on October 11 signed into law Senate Bill 510, which gives greater judicial oversight to prevent predatory practices involving structured settlement annuity buyouts. The new law is much needed and will help stop companies from preying on a very vulnerable segment of the population, says Patrick Farber, a structured settlement broker with Ringler Associates.
CAOC and myself thank Pat for his years of support for our organization and for this year's Platinum Business Friend sponsorship. His commitment to creating the best structured settlements for injured parties is commendable.
Instead of receiving lump sum payments for defendants after a usually life-altering injury, injured parties, under legal and financial counsel, often opt for structured settlements--where payments are spread over time through the purchase of insurance annuities. These annuities are designed to provide long-term financial security and stability to the injured or disabled party and their families. When payments are set up within a structured settlement, payments are tax-free for the life of the annuity. In addition, the settlement is designed so that the injured party or "well meaning" friends and relatives are not tempted to spend the settlement in a reckless manner. Studies show that up to 90 percent of lump sum payments are spent within five years or receipt.
When most people hear "structured settlement," they assume the dollar amount of the injury settlement is for hundreds of thousands of dollars or more. Surprisingly, that's not always true. Over the past 20 years, more than 50 percent of the structured settlements facilitated by Ringler Associates, the world's oldest and largest settlement annuity firm, were less than $50,000. Another approximately 17 percent were between $50,000 and $100,000. These figures are typical in most annuity firms.
For some individuals, their disability is the result of a catastrophic personal injury or from medical malpractice. SNTs are often used together with structured settlements resulting from legal actions taken when these types of injuries occur. When used in tandem, SNTs and structured settlements offer complimentary benefits that can enhance the quality of life for severely injured plaintiffs and their families.
For the past six months, the government has been struggling to come up with new, stronger reporting procedures and deadlines designed to prevent Medicare from double-paying Medicare recipients who are already scheduled to receive payouts for their injuries or illnesses under workers’ comp, liability or no-fault insurance plans. It appears the procedures and deadlines are now in place.
Most attorneys are familiar with creating structured settlements for their fees whenever their personal injury clients agree to their own structured settlement. Many attorneys, however, are unaware that these same fee structures can be arranged on a stand-alone basis--even when the client chooses to accept a lump sum payment or in certain non-injury, contingency fee cases.
