Treasury to hold hearings on IRC section 104(a)(2) on taxable damages

In today's edition of Speaking of Settlements I am joined by Jack Meligan, the President of SPI and former President of the SSP, to discuss the up coming hearings with Treasury on February 23rd on the clarifications regarding IRC section 104(a)(2). Mark Wahlstrom

These hearings are one of the first real reviews of the foundational tax code upon which the structured settlement industry is based, that being the exclusion from taxation of injuries caused as a result of personal physical injury. These hearings were originally scheduled to discuss expansions of that definition and modifications of the language, primarily to make clear the tax status of cases such as sexual abuse, wrongful imprisonment, illness caused by a hostile work environment, etc.

However, now an attempt is being made to raise the issue of 468B single claimant cases as part of the hearing, prompting a scramble by the various associations and interested parties to respond to the questions raised by this request.

Jack Meligan discusses his perspective on the always contentious single claimant 468B trust issue as part of this podcast, as well as raising awareness of the hearings and the issues to be discussed. Regardless of where you are on the politics and implications of this, you will want to watch the outcome of these hearings as they have a substantial impact on our profession, the definitions of what is a taxable damage situation and whether there will ever be clarity on the topic of 468B trusts.



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. 

If you are a trial lawyer, tax attorney or CPA and are looking for updated and unbiased information on structured legal fees, you can contact the offices of Wahlstrom & Associates to learn more about these products and how they can save you a huge amount of taxes.

Using annuities to fund retirement gets endorsement from Obama administration

Reports in the NY Times, Wall Street Journal and Boston Globe this week drive home the message that the Obama administration has come to the conclusion that one of the easiest and most pragmatic ways to boost retirement savings and provide a more secure retirement income for American's is to encourage the use of annuities.

For those of us in the annuity business, particularly those of us who work in structured settlement annuities or work with lawyers on their pension plans, this comes as welcome news but no surprise as to the value of the annuity to lock in guaranteed income you can't outlive, out spend or dissipate.

As we all know, American's have been in the thrall of the real estate and investment business for the last 25 years and believed the numbers tossed around that 11% annual returns can be expected on equities long term or that no one ever lost money in real estate. As the last decade has shown, plenty of people can and do lose money in real estate and that while long term yields on equities over 50 years are quite predictable, 5 and 10 year periods can go negative much to the dismay of investors and advisers alike.

As someone who has been a proponent of balanced investing and the use of annuities for years, this welcome recognition by firms such as Putnam Investments and others that when it comes time to start retirement savings, that an annuity is typically the best option for people, is long over due.

Listen in to this weeks edition of Speaking of Settlements to learn a bit more about the Putnam retirement Summit and get a handle on this sea change in how annuity contracts are perceived and used. As I have been predicting for over 18 months now, we are about to enter a golden age in the use of and appreciation for annuities for the vast majority of Americans and the sooner advisers, lawyers and others get a handle on this the quicker these amazing and fundamentally sound products will gain wider use and acceptance.