468b regulations that impact section 1031 like kind exchanges finally published

In some rare good news out of the US Treasury department we finally obtained new, final regulations on the application of IRC code section 1.469B-6 trusts. While at first read a lot of structured settlement professionals will be getting all excited and thinking that this is the long awaited ruling from Treasury on 468B qualified settlement funds and single claimant cases, it is in fact related to the issue of escrow accounts, trusts and other funds used during deferred exchanges, such as a section 1031 like-kind exchange.

However, while this is not really relevant to the mass tort and multi-claimant aspect of the structured settlement industry, it is of intense interest to the people over at Allstate and for those of us who are actively in the structured sales business. As we all know this area has languished as a result of a very slow build up in knowledge and familiarity with these annuities, but with a very likely capital gains tax increase on the horizon with the 2009 U.S. Congress the viability of tax deferral of capital asset sales using a structured sale annuity will be of far greater interest to tax payers and tax experts. 

The area of 1031 like kind exchanges is a further subset and niche in that market, but one with immense potential for those settlement professionals willing to invest the time, talent, marketing and process to make it a new line of business. My day job at Wahlstrom & Associates has been focused on this area for over two years and these clarifications should be welcome news in marketing to qualified intermediaries and others who inhabit the 1031 exchange world. 

I will be hosting Attorney Robert Wood, principal of Wood & Porter of San Francisco and the lead commentator on The Tax Law Channel, our newest channel here on LBN. If you want to know more about this ruling, obtain a pdf copy of it or investigate how you can start to work in this market, give me a call or send me an email after our podcast later this week. 

Again, it's not the long awaited 468b single claimant ruling, but it's almost as good if you are in the structured sales market. 

Rob Wood and Jan Schlichtmann on 468b trusts.

In part two of a podcast that Jan and Rob did while at the WTLA conference in Scottsdale, AZ we are part of an in depth discussion on the topic of 468b trusts. I know a lot of people ask me why I am such an advocate of these and my answer is that virtually no area of settlements is more wide open for growth then cases in which these are used. Now that I have LBN properly funded and staffed, your going to see a major expansion of the content and business focus of Wahlstrom & Associates, and that is going to be about our wide ranging work on cases involving 468b settlement funds. If you are a trial lawyer, a structured settlement professional or a plaintiff, these series of video and audio podcasts on structured settlements, settlement planning and 468b trusts are going to be of interest to you.

468b trusts and tax issues to consider.

One of the nations leading experts on the taxation of damages is Attorney Robert Wood of the firm, Wood Porter of San Francisco, CA and he joins Mark Wahlstrom and Scott Drake on Speaking of Settlements this week to discuss his recent article in the Journal of Tax practices and Procedure on the use of 468b trusts. 

As regular readers and listeners to The Legal Broadcast Network and The Settlement Channel know, 468b trusts, also know as qualified settlement funds, are one of the single most useful and powerful tools for the management of multi-claimant/multi-defendant litigation. They provide a safe harbor during the management and prosecution of a case into which funds can be received by defendants at various times and amounts, with out taxable receipt by the attorney or the plaintiffs in the case. This allows for a rational, transparent process by which legal fees are paid, expenses are paid, government benefits or liens calculated and accounted for, structured annuities purchased and funded along with other substantial benefits. 

However, as these gain in popularity and awareness in the trial practices of leading attorneys, the potential for mistakes or over reaching as to their use looms large and that is the focus of these articles and this two part podcast. Rob and Mark discuss how lawyers can avoid mistakes in the creation of these trusts in the first place, but in the article and podcast they also review the process by which a code sec. 468b trust for a lawyers trust account can potentially be established even after receiving settlement proceeds. This is a very technical area and one that attorneys or settlement professionals should tread carefully in, and only with top quality tax counsel that knows exactly what they are doing.

If you or your firm are considering the use of a 468b trust, or possibly have received funds in a recent case that you think might have been better served by the process of electing status of a 468b trust, then you should listen to these two podcasts or go to Rob Wood's site where you can access the complete articles.

You can listen to the first podcast on 468b trusts by clicking here.

You can listen to the second follow up podcast on 468b trusts by clicking here.