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.

With the birth of every new lottery “Mega-Millionaire,” stories warning about the perils of sudden money begin to re-circulate.  Last week’s headline that two more people joined the Mega-Millions fraternity saw a resurgence of such stories.

The moral of the stories all have a familiar ring:  Money doesn’t always buy happiness.  Or, it turns out, stability either!

Last Friday, CNNHealth featured Winning the lottery: Does it guarantee happiness?, an article which highlights the fact that not all sudden money brings the happiness and good fortune people expect.

For 20 years, I have witnessed people facing the prospects of sudden money from a personal injury settlement go through emotions, and challenges, similar to those described in the article.  Although not exactly the same, parallels can definitely be drawn.

Despite their distinct differences, those anticipating injury settlement proceeds may wish to heed some scholarly research about lotto winners that suggests people who choose to have money paid out over time are HAPPIER than those who take it all at once.  An excerpt from the CNN article reads:

” . . . Harvard economist Guido Imbens found that lottery winners who received annual payouts . . . were happier on average . . .”

An infinite number of reasons exist as to why those anticipating personal injury settlements, or lottery winnings for that matter, might opt to take their settlement in cash.  But many times, a properly crafted structured settlement is the best choice for those seeking to put their lives back together following the settlement.  As a needs-based solution to a difficult situation, structured settlements are an ideal choice.  Adding happiness to the mix is a pretty nice bonus.

So be happier!  Take the annuity.  Choose the structured settlement if your situation permits it.

“With a friend at hand you will see the light
If your friends are there then everything’s all right”

                                            – Elton John, Bernie Taupin –

Way back in the dark ages of communication, prior to 2004, people kept in touch in all sorts of ways that seem almost quaint by today’s standards.

They wrote letters, made phone calls, even sent emails.

But as you might have noticed, much of what we grew up thinking we knew about keeping in touch has changed. In case you have been in a cave these past few years, much of the change has been driven by this little guy:

In 2004, Facebook was launched. To say it has changed the way people keep in touch is more than a slight understatement. As the automobile did to the horse and buggy before it, iPhones, texting and social media seem poised to replace many of the more traditional ways of keeping in touch.

And for a traditional guy like me who once said of the Internet, “This thing’s a joke! It’ll never work,” I’ve decided to not take the same chance with this particular technological advance.

Thus, I’m writing to make sure I let you know about our newest method of keeping our clients informed. Not surprisingly, it’s called:

The Finn Financial Group Facebook Page

While we will still maintain our current e-newsletter to keep you abreast of topics of interest in your personal and professional lives, you will find our Facebook posts to be more succinct, yet more wide ranging, enabling you to focus easily on those topics of particular interest to you.

So please take a moment to visit our Facebook page and, to ensure you receive the regular updates, let us know you “Like” us by clicking the “Like” button on our firm’s home page. And please let us know if you have a page also that we may reciprocate!

I hope you like our Facebook page as much as we like providing you with valuable content you’ll find interesting and helpful. I look forward to your feedback since we exist only to serve our customers.

“Make Your Money Last a Lifetime.”

That’s the title of a December 1, 2010 article by personal finance expert Jane Bryant Quinn in her most recent AARP Bulletin column “Financially Speaking.”

On a personal and professional level, I’m always drawn to articles about retirement planning in hopes of gleaning some new nugget of wisdom I can use for myself and our clients. But, frankly, I’m usually disappointed.

After all, how many times do we need to read about the basics of saving more, spending less, diversifying investments and cutting up credit cards? If it was only that easy, right?

But the last few paragraphs of this particular article caught my eye because the author describes the Income Floor Strategy as one of three popular methods of creating a lifelong stream of income.

According to Ms. Quinn, the Income Floor Strategy allows you to:

” . . . provide for your basic income needs by buying an annuity with lifetime payments that start at the date you expect to retire.”

She goes on to identify a 2010 study by Gallant Distribution Consulting Research which:

” . . . found that more than half of financial planners now prefer the bucket (another method she describes in the article) or income approach.”

Since I was unable to turn up a copy of the study she referenced after a cursory search of the Internet I cannot speak to any methodology used or even its authenticity; however, this conclusion tracks with a number of other studies we’ve written about in the past.

NOTE: For further reading, you may also like some of our archived newsletter posts:

• Live Longer . . . Buy Annuities
• Too Old for Financial Security?
• Annuities Are The New Black

One thing that cannot be denied: People crave financial security!

Our firm was founded with a commitment to helping people achieve long-term financial stability in their lives. We’re proud that the structured settlements and related specialty annuity products and services we offer have played a vital role in helping translate that goal into a reality for many.

Please call anytime we can help YOU secure YOUR future! Wishing you the happiest of holidays and best wishes for a prosperous year ahead.

IRS Confirms: Wrongfully Imprisoned Exonerees Can Receive Tax-Free Structured Settlements

Affirming what’s generally been accepted as true for many wrongfully convicted individuals upon earning their freedom, the Internal Revenue Service published a Written Determination this past Friday (Number: 201045023) that removes any ambiguity surrounding the tax-treatment of compensation exonerees receive on account of personal, physical injuries suffered while incarcerated.

Click HERE to view IRS Memorandum 201045023

In its analysis, the Service noted:

“Compensatory damages for physical injuries and physical sickness (including damages received for economic losses flowing from the physical injury or physical sickness) that an individual receives from a state for wrongful conviction and incarceration are excluded from gross income under § 104(a)(2).”

Punitive damages and interest, however, are NOT excluded from gross income and are thus taxable. This position is consistent with the most recent history of this particular section of the tax code.

According to the Innocence Project, there have been 261 post-conviction DNA exonerations in the United States. And that number is expected to grow.

I have personally had the honor of helping secure, via structured settlements, the financial futures of several men who spent more than a decade in prison for crimes they did not commit. This welcome memorandum from the IRS helps advance the cause of justice by ensuring the system will not mistreat these victims a second time.

For additional information on the topic of wrongful convictions, please visit the websites of these innocence-based organizations we proudly support:

The Innocence Institute of Point Park University
Pittsburgh, PA
Bill Moushey, Director

Innocence Matters
Torrance, CA
Deirdre O’Connor, Executive Director

The Finn Financial Group remains committed to helping those who have been wrongfully imprisoned. We welcome the opportunity to partner with attorneys who are working to achieve justice for those affected. Please call anytime we can help you help them.

For more than 20 years, Kathryn Arnold has been involved in the entertainment industry. Her professional experience has run the gamut from production and development to financing and fund-raising on everything from major motion pictures and television to the Los Angeles Olympic Organizing Committee. Several productions she’s been involved with have gone on to win awards at respected Film Festivals around the globe.

“EBA,” she jokes referring to her wide-ranging experience. “Everything but acting!”

With such an in-depth understanding of the interworkings of Hollywood, it was only a matter of time of time before she became sought out as an expert witness and consultant for entertainment-related litigation and similar matters.

Kathryn provides litigation support and expert witness testimony on a host of relevant subjects in the entertainment world. She counts a number of high profile entertainment law firms as her clients.

But until recently, she had never heard about structured settlements. As one who now routinely helps clients quantify economic damages, she immediately saw the advantages. Kathryn and I recently chatted about structured settlements and she couldn’t agree more that the entertainment community has not yet embraced the concept nearly as much as it could. Or should.

“The entertainment field is a highly volatile industry filled with boom and bust stories. And the stakes can be quite high. One year, you’re hot and make a decent living. The next year, and possibly for the rest of your life, you’re just trying to get by,” she explains about the grim realities of Hollywood for many. “Structured settlements can help even things out for a settling plaintiff.”

Here’s a link to her recent article she wrote on her website that introduces the concept of structured settlement to her followers:

Click HERE to read theentertainmentexpert.com’s blog.

At the Finn Financial Group, we welcome any inquiries you have on cases involving entertainment-related disputes. Whether it’s a copyright infringement case, wrongful termination or similar tort, structured settlements can likely help!

Little Known Trivia: While Kathryn Arnold may never be able to lay claim to any acting experience, such cannot be said of yours truly. In a former life, I worked as an amateur and professional actor for stage, screen, print and film. With over 25 stage productions to my credit and very brief stints on popular soap operas including “The Young and The Restless,” (don’t blink or you’d have missed me!), the acting bug has long passed. The experience does, however, give me some insight into “the bizz” which I can apply when helping entertainment professionals make sound choices about their settlement options.

Safety of Principal + Modest Return = The New Normal

Fresh on the heels of last week’s newsletter which featured the insights of Laura Tarbox, one of the nation’s most respected and honored Certified Financial Planners and principal of the wealth management firm The Tarbox Group in Newport Beach (CA), I thought it helpful to share with you another article from the April, 2009 edition of Financial Advisor magazine that suggests other CFPs around the country recognize the value of fixed annuities as well.

In his article “Steady Eddy Annuity Bets,” author Eric Rassmussen identifies a number of CFPs who have come full circle in their views of the annuities they once shunned. Among the comments and observations of the author and the financial planners interviewed:

• According to Beacon Research, sales of fixed annuities increased 60% over 2008;
• ” . . . annuities have become the new black as people try to keep their kitties safe;”
• People are “no longer seeking outsized returns” but instead “have gotten religion and decided that a certain righteous austerity is in order – safety of principal with modest return;”
• One financial planner has increased clients’ positions in fixed annuities and then uses the income streams to dollar-cost average back into the market (NOTE: This is an excellent strategy to employ with a structured settlement BTW!);
• One planner believes fixed annuities help clients achieve their number one goal: To not lose money!

While this particular article also discusses indexed annuities, a product our firm has yet to embrace for a variety of reasons, the comments specific to fixed annuities are ones we enthusiastically agree with. Since most of our clients are making decisions about funds stemming from the settlement of a personal, physical or nonphysical injury claim, safety and security are of prime importance. They cannot risk losing money.

Other noteworthy statistics about the market in this article that highlight how quickly fortunes can change. And how hard it can be to recover from the loss:

FACT: In 1930, the DJIA declined 51% (sounds a lot like 2008-2009 doesn’t it?). It didn’t rebound to its previous high until 1954 (24 years);

FACT: In 2000, the NASDAQ dropped from about 5,100 to 1,750 in a year’s time. Today it’s in the 2,400s and many believe it may never eclipse 5,100 for generations, if ever.

The long and the short of it is this: Great potential reward is not possible in the market without great risk. A careful analysis of risk tolerance is essential in designing any financial plan, including those using proceeds from a personal injury settlement. The Finn Financial Group is eager to assist those for whom safety and long term financial security are of utmost importance.

CLHIGA Limits for Structured Settlements Increased to $250,000

In a move long overdue in the eyes of many, Gov. Arnold Schwarzenegger signed Senate Bill No. 1408 into California Law last weekend. The bill was sent to the Secretary of State on Monday, September 27, 2010.

This is welcome news for recipients of structured settlement benefits and those contemplating annuity purchases!

The move, an effort by the legislature to modernize existing insurance law to more closely align with the National Association of Insurance Commissioners (NAIC) Model Law, was introduced last February and has been moving through the legislative process since then without a lot of fanfare and with overwhelming support of elected officials from both parties.

Among the highlights, this bill:

• Increases the coverage limit for annuities and structured settlements from $100,000 to $250,000;
• Clarifies and extends the coverage of structured settlements for California residents, even if the owner of the structured settlement annuity is resident of another state.

In its background summary, the bill’s authors observed that:

“In the current economic environment, the relative importance of annuities for those who own them has increased in importance.”

“Annuities are the only financial instruments available today, other than Social Security and pensions, that offer a guaranteed lifetime stream of income during retirement. Along with giving retirees the peace of mind that comes from knowing that they will not outlive their assets, annuities provide another important benefit, a way to increase current income.”

“This ability of annuities to provide a guaranteed stream of income makes their strength, and reliability, highly important in this period when many other investments have suffered serious declines in value and other setbacks.”

A copy of the Legislative Counsel’s Digest can be found HERE.

This move by California is similar to efforts by other states to bring their Guarantee Funds up to date.

The Finn Financial Group, whose mission is to help people achieve financial stability in their lives, is pleased to be able to report this positive development to you. The life insurers we represent average 119 years in business and we believe that’s a pretty good track record. But just to give people added comfort, we view this move by the California legislature as good for consumers and commend its authors and sponsors for their efforts.

A Conversation with: Laura Tarbox, CFP
Top American Financial Planner Discusses Her Views on Structured Settlements and Fixed Annuities

For more than 30 years, Laura Tarbox has distinguished herself as the kind of financial planner many other financial planners aspire to be like. Regularly ranked among the “Best Financial Advisors” in the country by Worth magazine and earning similar plaudits from other respected publications, Laura heads The Tarbox Group, a prominent wealth management firm in Newport Beach, California.

Highly regarded for her client-centric practice which purposely limits the number of clients it services and employing a holistic, personalized team approach to client advising, she and her team of fee-only financial advisors commit themselves to helping their clients achieve optimum financial success.

We sat down with Laura recently to discuss her views on fixed annuities in general and structured settlements in particular.

DAN FINN: Many financial planning professionals fail within just a few years of starting in business. What’s been the key to your tremendous longevity and success?

LAURA TARBOX: From the very start, I made a commitment to focus 100% of my energy on servicing the clients I had, not spending time soliciting clients I didn’t have. This, along with the addition of some highly talented team members who share this focus, has resulted in an amazingly high client retention level.

DAN FINN: I’m assuming your clients run the gamut in terms of risk tolerance. Where do fixed term annuities fit into your practice?

LAURA TARBOX: Besides the obvious situation where a client simply prefers guaranteed lifetime income from a highly secure life insurance company, we serve as trustees for some fairly substantial estates. Some of those clients develop estate plans calling for children, grandchildren, spouses, partners, nieces, nephews, etc. to receive a fixed cash flow each year upon the death of the grantor. In these instances, it’s generally more cost-effective to the client to arrange for the purchase of an annuity to meet this goal. Plus it’s pretty easy! Absent the annuity, we’d need to constantly monitor and manage assets in a smaller sub-account or trust, which can be very inefficient.

DAN FINN: But couldn’t you make more money if you did manage the sub-account?

LAURA TARBOX: Perhaps. But if the annuity is a better choice, then it’s a better choice. It’s all about doing what’s right for the client and helping them accomplish their financial goals.

DAN FINN: This speaks volumes since, as a fee-only financial planner, you might recommend annuities even though you don’t make any money when annuities are purchased?

LAURA TARBOX: That’s correct! We are paid by our clients and ONLY by our clients to provide objective financial advice. When we recommend annuities, it’s because the annuity makes the most sense in that particular situation.

DAN FINN: Switching to Structured Settlement annuities for a moment, what would you say to anyone presented with an opportunity to enter into one of these arrangements?

LAURA TARBOX: Naturally it would depend on the situation and the unique goals of each person but generally speaking, structured settlements are an excellent opportunity for those who qualify. It’s hard to beat guaranteed income that is 100% income tax-free. Especially when coupled with the security of a highly-rated life insurance company the Risk/Reward Ratio is very attractive.

DAN FINN: We hear this less frequently since the “Great Recession” began but historically people might reject a structured settlement offer because they viewed themselves as being “very sophisticated about money” and felt they “could do better” on their own. What’s your reaction to comments like these?

LAURA TARBOX: Regardless of one’s level of financial sophistication, it’s extremely rare to find anyone who can’t benefit from some form of guaranteed income. Even if for no other reason than diversification. At our firm, we manage accounts for some very high net worth clients who view themselves as extremely sophisticated about money. Yet most would jump at the chance to receive guaranteed tax-free cash flow with tax equivalent yields on par with historical stock market yields. For people in the highest possible tax bracket every year, tax-free income becomes even more desirable. These clients likely wouldn’t structure all of their recovery. But for the secure portion of their portfolio, a structured settlement would seem a very sensible choice for most.

DAN FINN: So, depending on the client and the circumstances, you think structured settlements make sense?

LAURA TARBOX: They definitely make sense! I don’t think anybody wants to suffer a personal, physical injury just to qualify for tax-free income but for those who have been injured and are offered a structured settlement, they should think long and hard before passing on the opportunity.

DAN FINN: You’ve been an outspoken critic of variable annuities throughout your career. Do you still feel the same way?

LAURA TARBOX: I do. The merging of investment vehicles with an insurance product seems, in theory, like a sensible idea. But when you analyze most variable annuities, it becomes apparent there are better ways to accomplish the goals they purport to help clients achieve.

DAN FINN: How so?

LAURA TARBOX: Well, for starters they’re loaded with fees that seem to never end. Fees on fees on more fees! But to what end? That’s the question no one has ever been able to answer to my satisfaction. If one needs insurance, they should buy insurance. If one chooses to invest in the market, they should invest in the market.

DAN FINN: You’re not alone in your thinking among your peers on this subject apparently.

LAURA TARBOX: No. In fact, SmartMoney.com just published an article on this very subject entitled “What’s Wrong With Variable Annuities” that reinforces my position.

DAN FINN: So you’re not anti-annuity per se? Just anti-annuity that tries to be something more than a traditional annuity?

LAURA TARBOX: That’s right. Unfortunately, the bias against variable annuities has clouded people’s judgment about the fixed annuities we’re talking about.

DAN FINN: Any final thoughts?

LAURA TARBOX: Fixed annuities are an appropriate choice for many situations. Fixed Structured Settlement annuities are particularly attractive for a whole host of reasons. The tax advantage is good. They’re simple to understand. They’re secure. And because they contain no hidden management fees or expenses, they’re a good deal.

DAN FINN: A good note to end on. Thank you for your time, Laura. Best wishes for continued success!

LAURA TARBOX: Thanks, Dan. It’s been a pleasure.

For More Information:
To learn more about Laura and The Tarbox Group, visit her website at TarboxGroup.com. For additional information or for help with a structured settlement or fixed term annuity, please call to let me know how we can help.