Qualified Settlement Funds
Since it was founded in 2000, the Society of Settlement Planners (SSP) has consistently offered its expanding membership high quality educational programs.
Even prior to the Covid-19 pandemic, under President Joseph DiGangi’s leadership, SSP began utilizing online webinars as an effective learning tool for SSP members to supplement its annual educational conference.
It should not surprise any members of the settlement planning or special needs communities that SSP’s current series of online webinars address important topics and feature outstanding speakers utilizing effective technologies.
The most recent webinars are now available for viewing on the SSP website as well as prior case studies showcasing individual SSP members:
- Virtual Mediations
- Planning for Clients in Today’s Low Interest Rate Environment
- Qualified Settlement Funds
One common feature of these three most recent SSP webinars: they each include Chris Bua, Independent Life’s Senior Vice President of Sales, who is also a member of the SSP Board of Directors. Chris recently debuted Independent Life’s new podcast, Settlement Nation, with co-host Courtney Barber. You can also register for their stand-alone Independent Life webinar about “Structuring Attorney Fees.”
The SSP Qualified Settlement Fund (QSF) Webinar
With the increasing use of IRC 468B qualified settlement funds (QSFs) in single event cases, it is now essential that every structured settlement and settlement planning professional possess a comprehensive understanding of how, when and why they should be utilized. Without question, SSP is the leading professional association providing this education.
SSP’s 2020 Annual Conference in February had earlier concluded with a controversial presentation about QSFs by Glen Armand and Rob Wood which focused primarily on the “single claimant” issue and generated considerable audience discussion.
The SSP QSF webinar avoided direct discussion of the “single claimant” issue but did allow each of the two life company speakers, Chris Bua of Independent Life and John Arendt of Berkshire Hathaway, to summarize their company’s underwriting policy as it relates to QSFs. Each speaker was direct and informative – highlighting that QSF options now exist among annuity providers.
By structuring their webinar discussion in this manner, host Joe DiGangi and moderator Andy Cook avoided provocation and created a “deep dive” educational experience maximizing all of their speakers’ extensive QSF knowledge within the one hour time frame.
Chronologically, Mark Wahlstrom was the first speaker. With his extensive QSF experience covering mass tort and single event cases as well as structured attorney fees, Mark was the perfect choice to provide a “planner’s perspective” about QSFs. Mark discussed the types of cases most appropriate for QSFs, the need for a “team approach” with the settlement planner playing a limited but important role plus the importance of knowing the underwriting guidelines of individual annuity providers. Mark also emphasized the continuing need to educate the market about the advantages of QSFs.
Pi-Yi Mayo, the second speaker, is a nationally recognized special needs and settlement planning legal expert, and one of earliest attorneys in the United States to become involved with QSFs largely due to difficulties resolving Medicare and Medicaid liens for clients prior to settlement. Originally an active QSF administrator, Pi-Yi’s QSF work is now exclusively legal documentation and representation. Among the QSF issues Pi-Yi addressed:
- reasons for utilizing QSFs;
- selecting a court;
- documentation drafting and review;
- professional compensation.
Complementing Mark and Pi-Yi was Chris Lordan, a CPA who has filed federal income tax returns for more than 900 QSFs. Although QSF tax reporting may seem mundane, as Chris Lordan, pointed out, none of the important QSF benefits can be preserved without proper tax filings. Chris emphasized that all tax matters require planning and QSF taxation is no exception. A QSF administrator must have a tax ID and a plan. All QSFs use a calendar tax year so the 4th quarter generally requires interaction with an accountant. To ensure adequate cash at year end, an administrator must have good control over both assets and disbursements. All funds must be disbursed at the end prior to a final tax return.
With additional comments from Chris Bua and John Arendt plus a few questions from attendees, SSP’s QSF webinar was brisk and informative. Webinar host Andy Cook suggested that many settlement planners know more about QSFs than most plaintiff attorneys. At least for SSP members, that statement is probably true.