PLAINTIFF ATTORNEYS AND AD LITEMS need to be wary of accepting any structured settlement annuity from the broker representing the party they are suing. Without oversight from a Settlement Specialist representing the plaintiff, the net effect is that you are usingthe defendant’s expert, who often shares commissions with their client’s insurance company. Should anything go wrong, recourse would be against Plaintiff’s attorney and the Ad Litem and not against the Defendant (absent fraud).

The defendant’s insurance carder that uses its affiliate company or an "approved list" of companies to fund a structure is not maximizing dollars for the injured party (which is a function of shopping the market) but rather taking back dollars given the injured party by purchasing less benefit with more dollars.

Rates are subject to daily changes and pricing affected by "daily" rates, jumbo case discounts and age ratings. Unless you, as your client’s representative have the assistance of a qualified structured settlement person to assist you, your client may not only fail to maximize his or her settlement but help fund their own settlement.

Because the defendant’s broker has a primary responsibility to his party, competitive quoting and other important issues:

• To attach a "Commutation Benefit Rider" to the contract to provide liquidity at the death of the claimant.
• To provide additional security with "Secured Creditor" status.
• To consider split-funding with one or more insurance companies to diminish the risk of an annuity company becoming bankrupt or insolvent.
• To coordinate the settlement with public assistance programs through the use of a Special Needs Trust.
• To obtain medical age ratings from all carriers to ensure benefits are maximized.
• To make meaningful distributions that meet the needs outlined in the Life Care Plan and Economic report, using actual growth rates in each category.
• To offer a variable structured settlement annuity that offers the potential for tax- free gains from stock and bond investment accounts.

ADDITIONAL AREAS OF CONCERN

• Failing to recommend a structured settlement annuity or documenting the plaintiff’s rejection of a structured settlement annuity. A lawsuit settled in Texas in excess of $4 million on behalf of the plaintiffs against their former attorney and ad litem for not recommending a structured settlement has attorneys documenting their files in specific ways.
• Falling to use periodic payments in a taxable settlement may produce an even worse outcome than in a tax-free case. Litigation resulting in taxable settlements force plaintiffs into higher tax brackets. Don’t overlook taking advantage of deferring income to the new lower tax brackets in 2006 and beyond.