The same tax deferral benefit enjoyed by contingency fee lawyers for years is now available for another group of professionals often looking for a sensible tax break:  Business Brokers and Real Estate Agents.

This is terrific news for any realtor or business broker who has always sought a way to safely and conveniently defer taxes on commissions they earn for implementing deals for their clients.  The benefits to this method of planning are many:

• Deferring income taxes allows this group of professionals to balance out the highs and lows of a very cyclical business;
• Sums deferred earn pre-tax interest offering the same advantage as 401(k) and similar plans;
• Participants can arrange their income needs around marginal tax brackets to keep more of what they earn;
• Brokers can potentially avoid or reduce their Alternative Minimum Tax (AMT) bite;
• Those with long-range financial goals can secure their futures by arranging supplemental, tax-advantaged cash flows in their retirement years guaranteed by a highly rated life insurance company.

Typically, when a realtor or business broker facilitates a sale, they are paid a commission based on a percentage of the sales price of the business or property.  Commission is paid in the year of the sale at closing and the agent or broker promptly (and presumably begrudgingly) estimates the amount of this sum they need to set aside for Uncle Sam.

But now, thanks to a major life insurance company, successful agents and brokers can now arrange to more effectively manage their commissions.

Allstate Life, rated A+ by A. M. Best, announced today that they are rolling out this attractive option as an enhancement to the Structured Sale offering made available through a limited distribution channel several years back.  Through an arrangement with Allstate International Assignments, Ltd. which currently handles their Structured Sales offering, those who qualify can take advantage of this unique opportunity.

When compared to earning commissions, paying taxes and investing the remainder, some professionals estimate they would need to earn a rate of return well in excess of the historical stock market average just to equal what the Structured Commission pays (depending on assumptions made about future tax brackets).  The difference here, of course, is the lack of stock market risk since guaranteed payouts are considered “risk-free” in financial planning parlance.

CAVEAT:  Key to implementation is the phrase “those who qualify.”  The Business Broker or Realtor must be considered a “Service Provider” pursuant to Section 409A of the Internal Revenue Code.

But there’s more. 

Certain paperwork must be prepared by someone representing the life company (as of now, just Allstate) who has been authorized to implement these special-purpose transactions.  Because of the unique nature of this particular offering, the distribution channel has historically been limited to those familiar with the special paperwork and sequence of events which must be strictly adhered to in order for the matter to be properly consummated.  Do NOT assume your neighborhood insurance agent will be familiar with this.

So for now, since this particular missive has run longer than intended, suffice it to say “We Can Help!”  The Finn Financial Group is proud to be among a select group of firms in the United States chosen to help effectuate Structured Sales and the accompanying broker and agent commission deferral.  Call for an analysis or for additional information BEFORE the transaction is complete.  Because timing is everything, it’s critical the terms of the deferred commission be chosen before the sales agreement is finalize and the deal concluded.

The once trusted and highly respected Johnson & Johnson name has taken some major image hits in the last 15 months according to a recent article.  During this time, the $60 Billion company has voluntarily recalled over 50 products.

In its cover story, Johnson & Johnson’s Quality Catastrophe, Bloomberg/ Businessweek highlights a number of the products involved and suggests a systematic and widespread quality control problem of late.

Among the products recalled, the DePuy ASR metal-on-metal prosthetic hips are arguably the most troubling for the company and potentially the hardest to defend.  Michael Kelly, a partner at San Francisco’s Walkup, Melodia, Kelly & Schoenberger which represents a number of plaintiffs currently pursuing litigation over the defective hips, says that’s because marketing took priority over science.  Among other things, it is alleged that the manufacturer was aware of the defective nature of these particular products yet failed to address the problem.

Even Academia is re-thinking its curricula when it comes to J&J.  Our company’s Finn Financial Group Facebook Page  recently highlighted a video featuring University of Michigan professor Erik Gordon discussing the brand damage J&J is suffering in large part due to its handling of the DePuy situation specifically.  He suggests the ramifications will likely be felt (and studied) for years to come.

If you or anyone you know is experiencing problems with a DePuy ASR hip replacement, call us to let us know how we may be of service.

As March Madness heads into its final rounds, it seems an appropriate time to share with clients the good news that NCAA cagers aren’t the only ones rebounding.

According to A. M. Best, the life/health industry continues to recover from the financial crisis as evidenced by the improvement of key economic indicators.  Among the highlights:

• Total admitted assets improved 7.1% to $5.3 trillion;
• After tax net operating gain was $42.2 billion;
• Capital and surplus increased 8.7% to $338.4 billion;
• Net Premium Written (NPW) increased 14.5% to $543.5 billion;
  • This reflects the first time annual NPW has increased since 2008

The life insurance companies currently offering structured settlement and fixed annuity products continue to represent the creme de la creme of the life/health industry.  Highly capitalized with sound investment philosophies and long  histories of making payments on time, there’s no safer choice for your settlement proceeds or 401(k) rollovers.

Among the many positive reasons parents, courts and plaintiff attorneys choose structured settlements when settling a minor’s injury claim, one of the most overlooked is the fact that it can shield the minor’s recovery from the dreaded Kiddie Tax.

Faster than a child can grow from cradle to car keys, the Kiddie Tax can sneak up on those unprepared for it.  An article by “TaxMama” Eva Rosenberg appeared in today’s MarketWatch which highlights how problematic this tax can be.  (“Kiddie tax laws could cost you at tax time”)

Originally designed to target a small number of taxpayers who were circumventing tax laws by shifting assets into their children’s names, Kiddie Tax can be the bane of an otherwise meaningful personal injury settlement if not considered prior to finalizing the recovery.

When settling personal injury claims, this tax can easily be minimized or eliminated altogether if a properly designed structured settlement is crafted prior to securing court approval for the settlement.  Structured settlement proceeds, which flow to the recipient 100% income tax-free if the result of a personal, physical injury, can be tailored to meet specific, anticipated future needs.  And to avoid saddling the minor with an unnecessary tax burden.

A structured settlement is not always the best option for a minor settling an injury settlement.  But anyone who goes to court without first considering the impact of ALL taxes, in addition to rate of return and security, could unintentionally cost the minor money.

Best advice?  Have a minor’s settlement properly evaluated by an expert specializing in structured settlements prior to concluding the file.  I welcome the opportunity to assist.  Call anytime I can help.

As reported today on Bloomberg.com, the British Orthopaedic Association and the British Hip Society issued a statement that the failure rate of the DePuy ASR XL Acetabular System is more than twice what was originally represented when the device was recalled in 2010.

According to the article, nearly half of all patients who received the recalled device require a second surgery within six years.  The article goes on to reference the 350+ lawsuits recently consolidated in federal court in Ohio and the 220+ currently pending in California state court.

My personal interest in the matter stems from my own hip surgery in 2010.  Our firm stands ready to help those who have been adversely affected by the DePuy ASR Hip Recall in any way we can.  If you are anticipating a settlement, we can help you make wise choices about your settlement.  If you are unrepresented and seeking legal counsel, we can guide you.  Whatever your needs on this matter, we’re here to help.

And Why This Matters to Me

Then, just a few months out of the operating room, I learned of a worldwide recall of certain hip implant devices that were defective.  The DePuy ASR Hip Recall dispute now extends to all corners of the globe.

I’ve helped falsely convicted former prisoners establish their own path to financial independence following their exoneration into a world they were not fully prepared for.

I’ve helped paraplegics, quadriplegics, burn and brain injury patients, sex abuse victims and many other classes of plaintiffs and their conservators make sound financial choices when it came time for them to make decisions regarding their injury settlement recovery. 

But until recently, despite my best efforts to empathize with them, I could never fully appreciate everything my clients had gone through.  Could never fully appreciate the price they paid for their injury settlement because I had never gone through the same thing they had.

That is, until now.

I hope you’ll take a few moments to visit my new site and watch the short video I’ve created for current and prospective clients.  If you know anyone who has been impacted by this unfortunate set of circumstances, please let me know how I can help them.  I’m committed to helping.

You’ve spent a career laser focused on advocating for your clients.  You’ve tried cases.  You’ve negotiated settlements.  But now you’re thinking it may be time to “hang up the laces,” hand the reigns over to someone else and head for the barn.

Mixed metaphors aside, are you ready for this transition?

Risk is inherent in the life of any successful plaintiff attorney.  It’s what you’ve lived for.  And let’s face it.  If it was easy, anyone could do it.  Many don’t have the stomach for the uncertainty.   The competition.  You do.

Ironically, it is precisely this comfort with risk taking that leaves many plaintiff attorneys in a precarious position when they decide to retire.

Personal retirement savings accounts invested in funds promising growth potential may have been wise right out of law school.  But when retirement beckons, future happiness requires a philosophical shift in risk tolerance.  Your willingness to take risk, so attractive during your years as a practicing attorney, can obliterate your life savings if a shift away from risk is not considered.

The solution, according to an abundance of recent research, may be just an annuity away.

What is an Annuity?

Perhaps you’ve structured your attorney fees throughout your career.  If so, congratulations!  You understand the value of fixed annuities and have a jump start on the concept.  You’re a few steps ahead of the game.

But if you’re among the 70% of Americans who have no idea what an annuity is, you owe it to your future to watch the short video, What is an Annuity? from the Insurance Information Institute.

Fixed annuities can offer plaintiff attorneys the security they could never count on when complete strangers were deciding their client’s fate.

So, go ahead.  Direct your own verdict!  Look into getting yourself a fixed annuity.

Although it’s impossible to know who first ventured into culinary lore by slicing a loaf of bread instead of pulling it apart, historians pretty much agree that it wasn’t until July 7, 1928 when commercially produced, pre-sliced bread was first sold to the public from a bakery in Chillicothe, Missouri.

So when former justice Jerry Carr Whitehead, a native of the Show-Me State, recently compared structured settlements to sliced bread, it’s fair to assume he just might be in a better position than most to speak with some authority on the subject.

Justice Whitehead, recipient of the Lifetime Achievement Award from the Nevada Trial Lawyers Association, recently addressed the National Structured Settlements Trade Association in Las Vegas where he made the comparison.

In addition to recounting his first exposure to structured settlements, he also explained that his belief in structures was so complete that he eventually began structuring his attorney fees which allowed him to transition his law practice into a second career that included a judicial appointment and a successful mediation practice he operates from his office in Reno.

Listen to what he has to say by clicking the video entitled The Best Thing Since Sliced Bread on our website. He gives a very good primer on structured settlements and explains why he began to structure “every case that [he] could.”

I hope you enjoy this video and any of the others we regularly post on our site. And while I’m probably not much help in coaching you on the finer points of slicing bread, I’m positive I can help you with your structured settlement needs.  Please call anytime I can help.

Much is being written about the worldwide recall of ASR hip implants manufactured by DePuy Companies, a division of Johnson & Johnson.

According to attorneys at Walkup, Melodia, Kelly & Schoenberger, who filed the first DePuy ASR products liability lawsuit in the country, the manufacturers knew of the defect long before it recalled the device in August of 2010.

It’s little surprise that the attorneys at Walkup, Melodia, a firm widely respected for its many successful verdicts and well known for attracting top flight legal talent, were the first ones to bring the extent of this defect to the public’s attention.

In addition to the fact that many plaintiffs involved in the DePuy ASR hip recall lawsuits around the country will benefit from structured settlements, I have a very personal reason for following these cases so closely.

In May of 2010 I underwent bilateral total hip replacement surgery myself.

While I’m relieved to know my surgeon did NOT use the DePuy ASR hip implant device (recalled just three months later) for my surgery, I cannot help thinking how close I may have come to being a plaintiff myself.  Or may be some day.

Over the coming months I will be sharing more with you more about my personal experience with hip surgery.  Until then, know that we will be monitoring developments of this litigation closely.

Ernst & Young Analysis:  “Longevity Risk” Increasing

Finn Financial Group’s October, 2009 newsletter, Live Longer – Buy Annuities, featured research from a smattering of sources emphasizing the value and importance of annuities to one’s overall financial health.

As part of our commitment to helping clients achieve lifetime financial stability, we wanted to pass along some additional information to help you plan for your future and the futures of those whose lives you touch.

Americans for Secure Retirement asked Ernst & Young LLP to analyze the retirement vulnerability – the chance of outliving one’s financial assets – of Middle-Income Americans. First published in July of 2008, Retirement vulnerability of new retirees: The likelihood of outliving their assets, was last updated in 2009.

The study’s findings are consistent with others that emphasize the meaningful role annuities can play in addressing one of the greatest financial risks Americans face: Living too long!

Without additional guaranteed lifetime income streams,
such as income provided by an annuity,
middle-income Americans are at high risk of outliving
their financial assets and living their final years in poverty.

Ernst & Young LLP
for Americans for Secure Retirement

As you read, understand the “Middle-Income” net is a wide one that catches most of our readers – even those with substantial net worth – who can all benefit from having more “longevity insurance.”

To determine the Retirement Readiness for your state and to learn more about the retirement crisis, visit Americans for Secure Retirement. Also, the Finn Financial Group Facebook Page regularly features other helpful articles and links on this subject and MORE so be sure to check back there often.

While this edition of our newsletter focuses on retirement planning, we would be remiss if we failed to point out that those anticipating personal injury settlements have perhaps even greater cause for concern and would do well to educate themselves on the longevity risk all of us face as we age.

So call on us! We’re here to help. Whether you’re looking for structured settlements, structured attorney fees, Structured Sales, 401(k) and Pension Rollovers or simply want to purchase an annuity with savings, we can help you make the decision that’s right for YOU!