Executive Life of New York structured settlement beneficiaries are in for a rough ride

In a joint video commentary and interview on Speaking of Settlements, Mark Wahlstrom, President of Wahlstrom & Associates and John Darer, Principal of 4structures.com, discuss the looming problem for those who are still receiving structured settlement payments from Executive Life of NY. (ELNY).

For those of you who are unfamiliar with the situation, I point you to the excellent historical chronology at 4structures.com in which the sordid past of the ELNY  failure and reorganization. John does a fine job showing how this mess got started and what has brought us to this day.

Mark Wahlstrom discusses the Executive Life of New York structured settlements

The problem that annuity beneficiaries and owners of Executive Life of NY contracts face now is pretty simple in concept and stunning in scope. The assets that were being managed by the State of New York Liquidation Department for the last 20+ years are now going to be totally inadequate to make all of the remaining payments in full as has been assumed for years now. The politics, inflated investment assumptions, failure to communicate the potential of a future shortfall and a lack of will by those in charge to honestly address the problem, have created a perfect storm where some estimates indicate there could be a 25% to 45% reduction in future payments given the actuarial reality of this situation.  The result is that the State of New York may no longer have the option of keeping the rehabilitation and payment plan in place as is, but may be forced to commence a liquidation, with all of the negative elements that implies yet to be determined.

This will be the first of many on going video updates and interviews on Speaking of Settlements to provide context, resources and information to those impacted by the potential shortfall of Executive Life of New York.

Allstate Financial structured legal fees, a unique approach for lawyers

In today's segment of Speaking of Settlements, Mark Wahlstrom reviews the Allstate Financial structured legal fee, or structure attorney fee, program and several of the elements that make it so unique in the structured settlement industry.

First, Allstate is the originator of the non-qualified structured settlement, which in and of itself is a very unique distinction. Non-qualified refers to the fact that it is for taxable damage cases as opposed to tax free damage cases, or those covered under IRC section 104(a)(2). Several years back Allstate pioneered the development of being able to structure, or spread out, taxable damage awards over time and while they earned interest and remain one of the leaders in this major area of litigation. The Allstate International Assignments special purpose corporation, formed to handle these unique transactions, remains one of the leaders in this area nationally. 

Allstate's expertise in this area has also spilled over to the structured legal fees, where they are one of the very few life insurance companies that are willing to structure fees on both taxable and non-taxable damage cases, a fact that greatly expands the potential cases an attorney can defer and plan around. As you will see in this video, or by visiting the Allstate International Assignments web page, the underwriting restrictions are relatively modest and what you'd expect to see in these transactions, and cover a wide range of structured legal fee cases. A quick summary would include:

1. Allstate will do stand alone structured legal fees on both taxable and non-taxable cases.

2. Allstate requires a hold harmless letter and the beneficiary option selected is irrevocable under current standards, something to keep in mind.

3. Allstate will pay to the individual attorney or a partnership, but will not pay structured legal fees on referral fees for attorney's on a case.

In short, as with all structured legal attorney fees, you need to work with a trained, competent structured settlement expert that has all available markets, current underwriting requirements and is able to match up your needs and situation to the right company. However, for taxable damage cases where lawyers have here to fore not thought of structuring their fee, this program opens up some amazing options for tax deferral, retirement planning and cash flow planning for lawyers and partnerships in a wide range of cases. 

To learn more about structured legal fees or to view more of this series, go to Mark Wahlstrom's web page at www.wahlstromandassociates.com.



Are annuities being overhyped?

This question was asked in a recent Wall Street Journal article authored by writers Anne Turgesen and Leslie Scism, with the theme being that the recent news of promotion of annuities by the Obama administration is turning into marketing bonanza for life insurance agents  that could harm some investors.

A link to the full WSJ article is available by clicking here.

While I feel the headline was a little extreme, the premise of their story is dead on. That being that a rush to move people into fixed rate, immediate income annuities at the current historically low rates is going to hurt a lot of people long term when rates and inflation inevitably rise over the next 3 to 7 years.

In this weeks edition of Speaking of Settlements, I discuss this dilemma, which is faced by structured settlement experts such as myself on a daily basis. We all know that current interest rates are historically very low and will certainly go up over the next few years, but investors, savers or injury victims need to make decisions TODAY on whether or not immediate annuity income makes sense for them right now.

This will be part of a recurring series of conversations I will be having on the ideas and strategies for those looking to use annuities to fund or finance retirement, care plans, settlement plans and other conservative income strategies using insurance company products.

Structured legal fees, profile of the John Hancock program

In the first of our 10 part series on structured legal fees, I am profiling the John Hancock structured attorney fee program on today's Speaking of Settlements. As part of this series we will be providing, thanks to the assistance of the marketing staff at John Hancock structured settlements division, links to some of the information on structured legal fees and how they work.

As you will note in this series, I am attempting to outline the key elements of each companies offerings on the video so that trial lawyers, tax attorney's, CPA's and planners can know more about the amazing benefits of structured attorney fees. As this information illustrates it allows attorneys to defer income into future tax years, secure it with top rated companies, obtain competitive returns on the funds while it accumulates and pay for as long as they live, pay to their spouse or even to their partnership. John Hancock Tower, Boston, MA

It is my goal by the end of this series of programs on each of the life markets to drive home to the trial lawyer and tax professionals the importance of using this benefit for retirement and cash flow planning using structured legal fee programs.

The following material is available on these links:

Who do you trust? A brochure on John Hancock.

John Hancock structured legal fees brochures.

If you have questions on this series and you are an attorney or tax professional, feel free to contact Mark Wahlstrom at Wahlstrom & Associates in Scottsdale, AZ.

Month long series on structured legal fees

This month on Speaking of Settlements, I will be doing a review of each of the life insurance companies that underwrite or offer structured legal fees, or structured attorney fees. The review will cover the following life insurance markets:

• American General
• Symetra Life
• Liberty Life
• New York Life
• Prudential Insurance
• Met Life
• Pacific Life
• John Hancock
• Allstate Financial

As most structured settlement brokers or planners know, each company has it's own unique underwriting standards, types of business they write, beneficiary options, etc. It is important for lawyers, tax planners and others to be aware that not all legal fee structures are created equal and that the selection of working with a qualified structured settlement expert is essential.

This is a short edition of Speaking of Settlements, primarily to let people know to watch for our month long series on structured legal fees. This is crucial information heading into tax season and particularly as trial lawyers work to rebuild depleted or decimated retirement programs.