From our August 19, 2013 Newsletter:

 We’re Published Again

“Taxable damage awards and the use of structured settlements”

appears in the August, 2013 issue of:

“The magazine for Northern California Plaintiffs’ Attorneys”

Click [HERE] to read the article online

In 2013, our firm has been exceptionally focused on the the topic of structuring taxable settlements, verdicts and attorney fees for one very simple reason:  Recent changes to top end tax brackets, particularly in California and other high income tax states, have elevated the importance of this subject to unprecedented levels. Another way to look at it:

Taxable $ x (^ Tax %) = < $ 4 u

To better serve you, we have researched the subject extensively and developed some proprietary analytical tools designed to specifically help address the impact of Proposition 30 and the American Taxpayer Relief Act of 2012.

We invite you to contact us anytime for a complimentary and confidential demonstration so we can help you make more informed decisions about these taxable matters in advance of settling any of your pending cases.

BONUS: Schedule Your MCLE Session TODAY

As a service to the California legal community, we even created a FREE seminar/webinar based on this timely topic which has been APPROVED by the State Bar of California for 0.50 hours Minimum Continuing Legal Education (MCLE) credit.  If your law firm, bar association or other attorney group wants to learn more, just let us know.  Designed to conveniently fit into a “lunch-n-learn” session to accommodate your busy schedules.  Or, the perfect complement to a lawyers’ convention agenda!

I hope you enjoy the article and find it helpful in your practice.

Thank you for the opportunity to be of service and best wishes for continued success!

Dan Finn

August 16, 2013 – Remember our blog post from January when we cheered the fact that the 10-Year Treasury closed above 2.0% for the first time in almost six months?

Dramatic Interlude:  That’s OK, that’s what we’re here for.  Here you go: 10-Year Treasury Closes Above 2%

Back then, we gave you three reasons why we saw that particular benchmark as important.  It’s gratifying to look back now and see that we were spot on with every observation we made.

Well that, as the Monkees-minus-Mike-and-Davy once sang, was then and this is now.

Now, things are even BETTER!

Today’s close of the 10-Year, often a benchmark for the direction of structured settlement rates, at 2.83% is meaningful for a few reasons:

Treasuries are yielding nearly TWICE what they were at their nadir of 1.43% in August of 2012.

2.83% is within a gnat’s eyelash of 3.0%.  We’re almost to the next big hurdle folks!

Ergo, most structured settlement payouts are better than they’ve been in quite some time.

Choose Your Stations Wisely

While many financial and money “experts” may groan about this being bad news, keep in mind these folks will be viewing bonds as investments.

But for those receiving structured settlement offers from casualty companies TODAY or anyone choosing a structured attorney fee or fixed annuity product TODAY, they need not worry because they are not investors.

They are people looking to convert a given lump sum into the best possible tax-advantaged future cash flow option possible.

For those listening to that station, today’s close is outstanding news.

Where To Next?

While we’d like to think that a year from now or sooner, structured settlement and annuity rates will be double what they are now, we’re not convinced that will happen.

Our crystal ball works about as well as everyone else’s.

Could it happen?  Absolutely.  Will it?  Nobody knows.

For our part, we won’t be surprised if it’s a very long time, possibly a decade or more, before rates approach or exceed 4.0%.

So for now we’re celebrating the fact that our clients lately have been the beneficiaries of this very positive market upswing.  We’re always happy to be of service and especially thankful when we can pass along some good news as we’ve just done.

August 12, 2013 – If you were hosting a party and wanted to make sure your guests left your house with great memories of fun times and plenty of belly laughs, the American Academy of Actuaries likely wouldn’t top your list of potential entertainers.

Real or imagined, this group has the reputation of being nothing more than a collection of boring, bean counting duds.

If, on the other hand, you were hosting an event designed to provide your guests with reliable, factual data about their probable life expectancy and some advanced statistical models and projections designed to help them make the smartest possible choices about their retirement and injury settlement options, these guys would be your first choice.

And thanks to a public policy discussion paper published in June by the Lifetime Income Risk Joint Task Force of said American Academy of Actuaries, you don’t even need to host such a party.

Just point your friends, relatives, associates and clients here:

“Risky Business: Living Longer Without Income for Life”

The paper itself is a call to action regarding the challenges, both individual and societal, created by lack of sufficient lifetime income for those heading toward or already into retirement.

 “Lifetime income risk, or the risk of running out of income due to living longer than a retiree initially planned, is not just a personal financial issue but a societal one as well since public safety-net programs can be strained if expected to cover large numbers of individuals who have not addressed their lifetime income risk.”

The problem is compounded when individuals receive money for the settlement of a personal injury claim and the settlement is designed to to supplement their income for a lifetime.

Fortunately, Congress continues to support the tax laws that make structured settlements desirable for those who face the dual challenges of diminished retirement income options at the same time their ability to earn a living may be compromised.

We have been focused on the issue of longevity risk for years.  Check out some of our earlier blog posts and newsletters on the topic:

Live Longer . . . Buy Annuities

Annuities are the New Black

Why You Should Consider a “Personal Pension”

Retirement Goggles

Pension Choices

We’ll continue to beat the retirement security longevity risk drum and serve as your trusted source of information to secure your financial future.  So check back often and please call anytime we can help.

For Immediate Release:  August 7, 2013

Newport Beach, CA – The Finn Financial Group proudly announces that it has been honored with a 2013 APEX Award for Publication Excellence in the Education & Training Electronic Media category.

” . . . based on excellence in graphic design, editorial content and the ability to achieve overall communications excellence.” 

Among the notable organizations vying for an award in the various categories this year were:

The Walt Disney Company
Ernst & Young LLP
Jackson National Life Insurance
American Cancer Society
Cleveland Metroparks Zoo
American Airlines
Ford Motor Company
The Vanguard Group

The Award of Excellence further distinguishes Finn Financial Group as a:

Best Structured Settlement Resource.

“We are extremely proud to have been selected from among over 2,400 entrants for this unique honor, especially in a category we’ve worked hard to differentiate ourselves in,” said founder, CEO and President Dan Finn.

“Our firm was founded with a commitment to helping clients achieve long-term financial security and success using structured settlements, tax-advantaged annuities and related products and services.

“Providing timely and relevant educational content using a variety of educational media helps us fulfill that pledge and this award acknowledges our commitment to helping those we’re dedicated to serving.”

APEX Awards for Publication Excellence, now in its 25th year, is an annual competition for publishers, editors, writers and designers who create print, Web, electronic and social media.

Mobile users: Click Here

July 26, 2013 – A.M. Best interviewed me last week as a featured expert for their Insurance Legal Podcast Series, a series that “examines timely and important legal issues affecting the insurance industry from an attorney’s point of view.”

Even though I’m not an attorney, my firm interacts with and provides support to many lawyers across the country.  So this podcast seems a natural fit.

The podcast was an outgrowth of an article I recently wrote as a service to the California legal community which appeared in Advocate, a publication of the Consumer Attorneys Association of Los Angeles (CAALA).  That article, “Taxable Damage Structured Settlements,” expounds upon the theme this podcast touches on.

Since the podcast takes about eight minutes to listen to, I’ll let you get right to it.  I hope you enjoy the interview and look forward to answering any questions you might have on this or any related subject.

TEK Robotics Mobilization Device

July 16, 2013 – I’m apparently a little late to this party but I ran across the most fascinating video today.

Scientists in Turkey have created an amazing looking (and acting) robotics alternative to the wheelchair which gives paraplegics significantly more mobility.

The TEK Robotic Mobilization Device (TekRMD) could very well be the most liberating technological advance those with certain spinal cord injuries have witnessed since the invention of the wheelchair over 100 years ago.

The video is so uplifting (pun intended) that I’m not going to belabor the point here since you’ll want to see for yourself how this works.

But because of our line of work, we applaud any advancement that helps those whose lives have been uprooted.

This revolutionary piece of durable medical equipment holds tremendous promise to help those with spinal cord injuries better adapt to their surroundings.

We encourage ALL of the professionals with whom we regularly interface (claims professionals, attorneys, mediators, life care planners, case managers, etc.) to take a few minutes to watch how this great invention works.

You will be impressed.

July 13, 2013 – One of the more common applications of a structured settlement occurs when an injured party allocates all or some of their settlement proceeds to coincide with anticipated college expenses to help themselves or their children or grandchildren pursue higher education.

Courts across America strongly support the use of structured settlement “College Plan” when approving minors’ injury claims.

For good reason.  Structured settlements:

• Flow to the recipient 100% income tax-free (principal and interest) if the settlement is the result of a personal, physical injury
• Payments are guaranteed by the annuity issuer
• There are no management fees, costs or expenses associated with establishing a structured settlement
• There is NO PENALTY if the funds are used for purposes other than college

This last one is often overlooked. Think about it:

A prospective student could opt for a career in the military.

A student could earn a scholarship.

Not everyone is college material.

And if you contrast these advantages and disadvantages with those of another popular college savings vehicle, the 529 plan, more differences come into focus.

Named after the section of the United States Tax Code that governs them, 529s are in wide use and can be an excellent way to provide for a child’s or grandchild’s higher education.

But unlike structured settlement payments established to pay out precise sums on precise dates, 529 plans have penalties written into the Code if the funds are not used for qualified education expenses.

Further, when tied to a mutual fund as many are, there is no certainty the value of the account with grow to the desired sum by the time funds are needed.

529 plans are not among the products we currently offer so we have no “dog in the hunt” as they say.

But we thought you’d like seeing a list of states with the BEST and WORST 529 plans based on reported investment performance.

We hope you or your child are never involved in an accident.

But if you are, a structured settlement can be a sensible part of the injury resolution solution and we stand ready to assist as your advocate.

July 9, 2013 – The first fatal airline crash in the United States in nearly four years naturally stirs interest and speculation.

What happened and why?

What happens to the families of those killed?

What happens to those on board who lived?

And as with any accident, the conversation always turns to who’s at fault and how those impacted will be compensated assuming claims arise from the incident.

Yesterday’s CNNMoney article “Asiana passengers likely to get millions” focuses on the potential financial outcome of the claims process for the victims.

The article quotes noted aviation personal  injury lawyer Arthur Wolk who specializes in air crashes. Wolk points out something often overlooked by a public that focuses exclusively on those who have died:

Not all injuries are readily observable!

One particular paragraph in the article caught our eye:

Wolk said even the 123 passengers on the plane who escaped without any physical injuries are likely to see seven-figure settlements from the airline and its insurance carriers due to Post Traumatic Stress Disorder (PTSD).

An Important Distinction

One issue not raised by the article is the important difference between personal physical injury and personal non-physical injury as it pertains to claim settlements. To wit:

Damages paid on account of personal physical injury (excluding punitive damages) are exempt from income tax per IRC Section 104(a)(2).

Damages paid on account of personal non-physical injury are NOT exempt from income tax.

Understanding this distinction is crucial for anyone entering into settlement discussions such as those likely to stem from the Asiana Airline 214 crash.

And depending on each individual situation, it’s entirely conceivable that a plaintiff in one part of the plane will have sustained physical injuries while fellow passengers in another part will “only” have sustained non-physical injuries.

We are NOT downplaying the seriousness of PTSD. Far from it.

But the tax code is clear:  Under current law, emotional distress on its own is insufficient to constitute physical injury.

Structured settlements available for both

Fortunately, whichever category each plaintiff falls into, a structured settlement will likely be a part of the solution.

And of this we are 100% certain:

If these settlement figures come anywhere near the dollars Mr. Wolk suggests, those with non-physical injuries will likely be able to mitigate their tax burden by choosing to settle their claim using a . . .

Taxable Damage Structured Settlement

While it’s too early to know with any degree of certainty how any settlement discussions will unfold, we urge anyone considering ANY settlement offer to fully evaluate the impact of taxes on their settlement before agreeing to anything.

We stand ready to assist anyone requiring assistance.

July 8, 2013 – Strong. Safe. Secure.

The other three little words everybody loves to hear.

Especially when it comes to money. Everybody needs reassured that their money will be there when it’s promised.

According to the U.S Census Bureau, there are fewer than half the number of life insurance companies in the United States today than there were twenty years ago.

Some have merged. Some have failed.

And some, particularly those that offer structured settlements, are among the strongest the industry has to offer. They have withstood the test of time, have lots of money, a sound investment philosophy and a long track record of making payments on time.

They are “long strong.”

Standing the Test of Time

The July, 2013 issue of Best’s Review features an article. “Standing the Test of Time,” highlighting those excellent life markets which have demonstrated a consistently strong track record for a long time.

(NOTE:  Access to link may require registration)

Eleven life markets have retained an A.M.Best rating of A or better since 1928. Three of those companies (27%) are leaders in the structured settlements industry, listed here alphabetically:

Metropolitan Life

New York Life

Prudential Insurance Company of America

And when the list is expanded to include companies with a similar track record for fifty or more years, two additional market leaders surface (also listed alphabetically):

Pacific Life

United of Omaha Life

But the good news for structured settlement markets doesn’t stop there. In the same issue, a listing of the Top 25 U.S. Holding Companies, 2012 connects the three remaining structured settlement markets, some of which are also also on this list (ranked by total assets):

American International Group, Inc.

Berkshire Hathaway Inc.

Liberty Mutual Holding Company Inc.

Taken in aggregate, the eight (8) life markets currently offering structured settlements:

• Average more than 100 years in business
• Have assets in the trillions of dollars
• Have revenues in the billions of dollars
• Carry Excellent or Superior ratings from A.M. Best

For all these reasons we’re proud to represent these outstanding life markets every time a client seeks us out for help securing their financial future with structured settlements and structured attorney fees.

Kudos to all these great companies. We stand strong with you and hope to do so for a long, long time!

July 7, 2013 – Most of us will never know the heartache that accompanies the loss one experiences when a loved one is killed as a result of an air disaster.

Unfortunately, the family, classmates and friends of the two 16-year old Chinese schoolgirls who died yesterday during the Asiana Airlines Flight 214 crash in San Francisco no longer find themselves in that category.

No words are adequate. Grief after such an event must be absolutely crippling.

But for anyone suffering from such a tragedy, there is help.

AirCraft Casualty Emotional Support Services (ACCESS) provides FREE peer-to-peer grief mentoring services to anyone suffering from such a tragedy. ACCESS is unique in that all bereavement support is conducted by those who have themselves suffered the loss of someone in an air disaster.

They understand. They’ve been there.

ACCESS was founded by someone who learned firsthand just how destabalizing it can be when you lose someone close to you unexpectedly.

To learn more about this fantastic organization and the journey of my amazing friend, Heidi Snow, that gave rise to her founding of ACCESS in 1996, please visit the website.

Finn Financial Group has proudly supported this special organization over the years because it believes so passionately in its mission and the good work that has resulted from Heidi’s tireless leadership.

Our hearts go out to the survivors of Asiana Airlines 214 as we keep them in our thoughts on this sad day.