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Laws of the Universe

As one moves through life, you discover certain patterns that invariably repeat. I call them “Laws of the Universe”. A few examples might include: “Never put on a Halloween costume unless you are willing to spend the night in jail in it”; “Changing lanes always speeds up the lane you just left” and the classic for adolescent males, the truism that “Hey, watch this!” is usually followed by an emergency room visit. (See last month’s newsletter).

These Laws are straightforward and they brim with common sense. But how then do they pertain to this publication? The growing use of structures today seems to be coinciding with an increase in the number of multi-party cases we see. More parties means more experts – including structured settlement experts – and this can be a good thing, as long as the experts are ethical veterans who know what their clients’ interests are and who can competently represent them. But beware of the “empty chair” - at least don’t let it be on your side of the table.

Law of the Universe: “If they’ve got a structure guy; you need a structure guy”.

No gender differences here: you might just as easily say “If they’ve got a gal; you need a gal”. Either way, my point is the same: if your adversary brings an expert to the party, make sure you have one of your own. There are no secrets anymore about how a proper structured settlement is put together but that does not mean that there aren’t differences. Even mild variations have a different effect on the parties and most litigants are not well enough versed in these transactions to understand in what way a given change will affect their own situation.

These are multi-decade, big dollar obligations being created and moved around and it is in all parties’ interests to ensure that they are done correctly. And the ONLY way to ensure that YOUR interests are protected is to retain and involve your own expert.
Who should you entrust your structures to? The first and most obvious candidate would be a credentialed expert. In our business that means a “Certified Structured Settlement Consultant” (such as your friendly neighborhood structured settlement newsletter author). With a credentialed expert involved in the case, you know that your client’s best interests are being looked after by an experienced professional well versed in not only how to best use the advantages a structured settlement to help resolve a case but who is also sensitive to the rules and policies that the parties have established for how they want their structures done. In other words, they’ll know how to craft the structure itself so it works for all parties.

And then there is the issue of how to handle the other parties’ structure experts. Ours is a small industry and in any given region, the experts all know one another. Whatever their professionalism, it is imperative that you remember why that other expert is there: to look after their clients’ interests, not yours. This is a critical distinction.

Some advocates will assert that only their client has an interest in how the structure is crafted and that the other party has no interest and should have no involvement or “say” in how it’s done.

It just can’t work like that. Structured settlements are multi-decade, big dollar financial arrangements crafted in the context of a full and final release of claim. Not only does everyone want the big dollar obligation properly handled, but no one wants anything in the way the structure was put together to possibly void the release, and give rise to the case being reopened at some future date. Settlement is not the place for untried, untested, or unknown financial arrangements. The methodology for creating a qualified and dependable structured settlement has not changed in over 25 years. The transactional design is robust and the instruments used to ensure future financial performance battle tested. Structures work – but not if they are done wrong.

Back to the other side’s experts. Whoever the other side’s “guy” or “gal” is, it is my job to understand their qualifications, their products or services, their interests in the case and the licensing and legality of their activities. When appropriate experts have been retained by your adversary and they are proposing legitimate strategies and methodologies, we will seldom have a problem and the relative professionals work constructively to close out the case in proper fashion.
However, you hire me to sniff out problems. Should an amateur enter the picture (any financial anyone who has no direct experience with IRC Section 104-qualified structures, no matter what their qualifications in their other field), or even the odd structure veteran who might propose a funny idea, I am going to sing out and we will get to the bottom of what’s been proposed. But I can’t help you if I’m not in the loop. The best way you can help yourself is to get us involved in your case early and keep us involved throughout the negotiation process. This way we can keep the surprises to a minimum.

Law of the Universe: “If they have an attorney, then you have an attorney. The same Law applies to structured settlements “If they have a structure expert, then make sure you have a structure expert.”

Do you have a case where a structured is being considered? Are your interests being properly represented? Call Frank C. Kilcoyne, CSSC at 800-544-5533 I am here to help.