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Why My Clients Actually Hire Me

 

There was a time when being a “settlement broker” actually described what I did for a living – but not anymore. Yes, my firm brokers the placement of settlement annuities, but that activity is so far after-the-fact that it’s not really why anyone calls us anymore. What they’ve learned is that the time to call us is long before settlement, not after. Why?

Because the “value” of a case is a slippery thing, involving consideration of many factors, some of which can be pinned down to hard numbers and some of which cannot. And it is in this “pinning down to hard numbers” function where we can really add value – often to both sides.

The first thing we have to do is accumulate relevant data. Past damages are not usually the subject of much debate but estimates of future damages range far and wide. Part of this is owing to the dynamics of our adversarial process; each party seeking to maximize or minimize damages in line with its interests. Life care plan experts develop competing schemes of future care with estimates of likely future expense. But in settlement negotiations, the only number that matters is how much might be needed that day for the parties to agree to a compromise.

So one of our most important pre-settlement functions is to aggregate the various components of a life care plan and convert them into a single “cost today” dollar sum. We take the myriad components of future damages including future medical care, attendant care, lost wages, loss of fringe benefits, loss of parental guidance and household services, and render them down into a single cash flow.  Then we price that cash flow. We can tell the parties just how much future care a certain dollar sum can provide. Guaranteed.

Often we must go a step further because this cash flow analysis has to be measured against any other sources of funding including Medicare, Medicaid, the Medical Indemnity Fund, Workers Compensation, private insurance, or other collateral sources. Liens and claims of subrogation against the pending settlement or future payments must be verified and factored into the settlement calculus as well. Before the injured party can agree to compromise their claim, it is imperative that they have a detailed understanding of how these programs may affect their settlement or award.

Once we understand how various governmental or private programs may impact future care, it’s often necessary to re-design the actual cash flow plans to better suit the plaintiff’s situation.

Design of these plans is no simple matter. Not only must they provide the benefits needed to fulfill the analysis we have completed to date, they must also strike a balance between highest potential total payout and highest minimum guaranteed payout. These are not the same thing.

Presenting this information in a clear manner to a highly stressed (and often unsophisticated) plaintiff during mediation requires a calm demeanor and clear approach. When dealing with too many numbers, it’s easy for most people’s brains to simply jam up and shut down. In our experience, it helps to keep these plans anchored in the framework of future care with which they are already familiar.

Our construction of the actual periodic payment plan can impact this value decision as well, as alternative cash flows will price out differently with the various annuity providers. We can often advance on certain priorities via the manner in which we blend companies to provide a more secure diversified plan.

Once the parties agree to a gross settlement sum, we then move on to the funding and documentation phase. Here our job is to confirm that the settlement funds have been properly allocated to the various categories of settlement, including but not limited to attorney disbursements, liens, attorney fees, immediate cash to plaintiff, and of course the sum required to fund the future periodic payments.

Then we help prepare and review the requisite closing documents, which can be one of our most critical functions. Since many of our cases involve future payments extending fifty years into the future or more, the content of these final documents really matters. A case may be completed with a single settlement agreement and release document or it may also involve court petitions, orders, trust documents, and infant compromise orders. The accuracy of these documents is so important that, at our firm, we not only review every document, but we require that two sets of eyes look them over.

Once documents have been approved and executed, our attentions turn to collection and delivery of the annuity contracts and assurance that first payments arrive when and where scheduled. And our involvement does not end there: we maintain our closed files on every case in the event a payee or a beneficiary has a future question or concern. And they do call – often decades later - with questions which we are glad to answer.

This may sound like a lot of work and it may not be the kind of thing which excites most people. But, when our work is done, I get to drive home knowing that I have helped my client resolve a difficult case and I have helped secure the financial future of a vulnerable person who would otherwise face severe challenges preserving their recovery.

I have been crafting structured settlements for 26 years now and, out of the thousands of people I have helped, not a single one has come back to me to say they regretted their decision to structure their settlement. It may be a lot of work, but it’s a deeply satisfying result.

Are you working on a complex case? Do you think your case could benefit from what we do? Call Frank C. Kilcoyne CSSC at 800-544-5533, I am here to help.