Litigation

468B QSF Settlement Consulting

By John Darer

Patrick Hindert's pedantic demagoguery of the day focuses on a new concept which he labels 468B QSF settlement consulting. The concept ostensibly involves the standard use of a 468B QSF trust fund that in many cases adds needless extra cost to a settlement transaction.

As a settlement consultant who hold the credentials of Chartered Financial Consultant,  Registered Settlement Planner, Chartered Life Underwriter and Certified Structured Settlement Consultant, who has considered himself a settlement consultant long before the concept was co-opted by Hindert last week, I find it hard to believe that Joe DiGangi as President of Millennium Settlements had Hindert's interpretation in mind when he made his presentation at the NSSTA Regional meeting in Orlando last month.

Hindert continues to focus on what he calls "the claim management model", a term of scribble that appears to ignore the "real estate model" that seems have been adopted throughout the majority of the industry.

The "real estate model"  which operates on the premise that all parties deserve representation, includes the secondary structured settlement market,  and includes non qualified structured settlements. For pedant's sake,  the parent of a major defense oriented firm obtained a private letter ruling on non qualified structured settlements!  Moreover, the "real estate model" does not ignore IRC 468B QSFs and recognizes payees as other than injury victims (for example when special needs trusts and medicare set aside trusts come into play).

But why don't we address the corpulent slobbering "Flabby The Gut" in the middle of the room, that all structured settlement models DO NOT IGNORE what Hindert and the factoring industry deem the structured settlement secondary market. To the contrary, the structured settlement transparency initiative was adopted by less than 5% of the structured settlement industry.  While I may not like this particular brand of sheets, the structured settlement industry has made its bed. The structured settlement industry HAS adopted factoring and in a big way. Many have just not come out of the closet on the issue. As disclosed by Rhonda Bentzen, the heavyweight champion for factoring embedded in the structured settlement industry, many of its members  she works with (90%) receive fees for consulting on structured settlement factoring transactions, even though such fees may not be disclosed or advertised as services on their websites or marketing materials. Today some settlement consultants work with factoring companies to offer loans to attorneys who structure their fees.

Factoring is apparently such big business for the structured settlement industry that the majority of its members are willing to soft shoe the marketing practices of the factoring industry. Factoring also offers significant business opportunities to many lawyers and law firms for insurance companies and secondary market companies. I'm not passing judgment. This is the reality. Does anyone dispute these facts? 

Full post as published by Structured Settlements 4Real on February 26, 2009 (boomark / email).