Delta Settlements Sponsors JWLA Judicial Reception

Delta Settlements has been a champion of many causes over the years.  We are very pleased to announce that we have accepted a sponsorship role for the 2012 Jacksonville Women Lawyers Association’s Judicial Reception on June 12th. This event recognizes both Judges and Magistrates in our area and allows us to say “Thank you” for the service and dedication that they provide.  The JWLA has been helping promote the advancement of women in the field of law since 1982.  We are proud to join the JWLA in thanking our Judges and Magistrates.

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Structured Settlement Market Survey Earns Client 15% More For Her Financial Future

This week provided a great example of why an injured plaintiff and their attorney should ALWAYS utilize their own consultant when contemplating the use of a structured settlement.  Our client was the victim of a horrific sexual assault and as part of her ultimate settlement package, a structured settlement was included.   One of the liability carriers, a member of the Chartis Insurance family, and their brokerage firm representative, Atlas Settlements, would only agree to fund the annuity through an “approved list” of annuity providers.  Approved lists are common in the industry and are somewhat understandable if the list is tied directly to a minimum financial rating, such as “A+” by A.M. Best.

However, the list our client had to choose from was a nonsensical group of companies that included “A”, “A+”, and “A++” rated entities.   After working with the client and her advisors to create a plan for her financial future, Delta Settlements was able to obtain the best return with a well-known “A+” rated insurance company; a company that was not approved by Chartis.  It was not enough that our client had suffered traumatic injuries to begin with, but now was getting denied a 15% higher return by Chartis as part of the claim resolution.  As an advocate for innocent victims like our client, this was unacceptable to us.  We pushed back and ultimately gained approval.  If Delta Settlements had not been retained to consult on this case, this victim would have been inevitably victimized again.

If you are thinking about including a structured settlement as part of your settlement terms, please contact us for a full market survey so that you are not taken advantage of by the likes of Chartis and other liability insurers.

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Personal Injury Attorneys and Injury Victims, Listen Up!

You simply cannot afford to ignore structured settlements.  The excuses range anywhere from the misconception that a structured settlement is just another time consuming task, to preconceived notions that all clients just want a lump sum and to move on.  Other attorneys have ignored structured settlements by simply carrying the “if it ain’t broke, don’t fix it” mentality.  One of the most popular reasons attorneys ignore structured settlements results from feeling that they are not sufficiently knowledgeable in the area, and do not have time to learn.  All of these excuses are remedied by simply bringing in a structured settlement planner.

Aside from these misconceptions, attorneys need to remember they have an obligation to zealously represent their client and are remiss to ignore the benefits a structured settlement may provide.  In fact, there have been cases where the plaintiffs’ attorneys have been held responsible for failing to present structured settlements to clients in resolving their cases.

The decision to present various options a structured settlement may provide a particular claimant should not be solely out of fear of attorney accountability. Isn’t it just good business practice in general to provide the best possible outcome for your injured client and ensure their future care? I do not think it is any secret that more than a handful of choices exist for an injured party seeking representation. If an attorney brings in a structured settlement planner to work with the injured party who presents options tailored to that party’s needs, which in turn maximizes the injured party’s recovery, it seems logical that you’re going to have a more satisfied client.

So what do you have to lose? As an attorney representing an injured party, why not consult a structured settlement planner who will work with you to ensure the best result for your client? There is no hidden agenda, or hidden costs involved, there is nothing to lose. Having a structured settlement planner costs nothing for the attorney or the client. The structured settlement planner will look at the injured party’s needs, discuss their goals and work together to present options that serve to meet those goals and maximize the settlement proceeds without prematurely exhausting the funds. Of course a structured settlement is not the best solution for every case and your planner will indicate such if it does not make sense for a particular injured party’s specific situation.

It does not necessarily have to be an enormous settlement amount in order to benefit from a structured settlement. There are many situations wherein cases settling under six-figures greatly benefit from a structure, but those benefits cannot be considered if you fail to engage a structured settlement planner.

Injury Victims – Plaintiffs
You are the reason structured settlement options exist. A structured settlement is not something created by the financial sector looking to prey upon the proceeds of your settlement funds. Rather, the government has allowed for injury victims to receive their settlements in the form of periodic payments through a tax-free income stream, with the intention of not prematurely exhausting the settlement funds. While a structured settlement is not the right option for every case, the injury victim should absolutely ask their attorney or structured settlement planner to see if their case would benefit from such.

In general, the benefit of a structured settlement through periodic payments largely depends on the type of injury and type of person in the particular case. The following types of injuries or cases are the most common that benefit from a structured settlement through periodic payments:

  • Injuries requiring ongoing medical care, treatment, or rehabilitation;
  • Injuries involving loss of limbs;
  • Injuries involving multiple fractures;
  • Injuries involving serious burns to the person;
  • Injuries resulting in moderate or severe permanent disability or injury;
  • Spinal cord injuries;
  • Moderate to severe head injuries;
  • Wrongful death.

In addition to the type of injury involved, such as those listed above, the type of person who has been injured may also help determine the suitability of a structured settlement periodic payment plan. The following general categories are merely given as examples:

  • Minors;
  • Elderly persons without significant income sources to provide for their care;
  • Persons with physical or mental hardships or disabilities;
  • Persons with poor financial management habits;
  • Persons needing long-term or lifetime income streams to cover ongoing costs
  • Persons without immediate need for large amounts of money.

Common Types of Structured Settlements
Another consideration of a structured settlement involves an awareness of the many different options available depending on each particular injured party’s needs and goals. A structured settlement planner is able to listen to these needs and goals of the injured party and customize a plan or present several options best suited to meet those specific needs and goals. While there are far too many ways of tailoring a plan to list them all, the following list illustrates some of the more common ways to structure settlement funds:
(Keep in mind, in any of the payment arrangements listed below, it is very common to use some of the settlement funds to immediately pay current and past expenses or bills, attorney fees, and any other immediate cash needs)

  • A set payment amount received over regular intervals for life. (i.e., $2,000 per month, for life)
  • A payment amount that increases periodically and are paid regularly for life (i.e., $2,000 per month, increasing 3% annually, for life)
  • A set payment amount or periodically increasing payment amount, paid for life, and with a specified period of time wherein even if the claimant dies, the payments will continue through the end of that specific period of time to the claimant’s estate or to another contingent payee. (i.e., $2,000 per month, with a 20 year guaranteed payment period, wherein should the claimant die, their estate or possibly children etc., will continue to receive the payments)
  • A set payment amount received over regular intervals for a fixed period of time, which will be paid regardless of whether or not the claimant is living. ($2,000 per month, for 20 years, paid regardless of the claimant’s lifetime)
  • A set payment amount received over regular intervals for life, plus additional lump sum payments at specific future dates. (i.e., $2,000 per month for life, with a $25,000 payment in 10 years and a $75,000 payment in 20 years)
  • Any of the above payment structures, plus the addition of specified funds for anticipated future needs such as college funds or new house funds. (i.e., $2,000 per month for life, plus $80,000 lump sum for children’s’ college expenses)
  • Any of the above payment structures, plus a medical trust funded with a specific amount of money to be used for future medical expenses.
  • Any of the above payment structures, plus a special needs trust to pay for any other anticipated special needs specific to a particular case)

Sample of what a Structured Settlement could look like:

Injured Party / Claimant: A female, who is 8 years old, struck by a car while riding her bicycle suffered a broken arm and leg.  The case settled for a total of $490,502.  Considering her young age, and need to maximize the settlement funds a structured settlement was agreed upon wherein the $490,502 provided a guaranteed amount of $1,102,028 with an expected payout of $1,975,175 as illustrated in the chart below.

In summary, for the example given above, the guaranteed amount the claimant would receive would be $1,102,028. The expected amount the claimant would receive, based on current life expectancy estimates, would be $1,975,175. Finally, the cost to provide these funds to the claimant would be in the amount of the $490,502 from the settlement funds.

If you have any questions about this posting or would like further information relating to a particular case you have, please contact one of our knowledgeable planners who will happily assist you.

(407) 252-5156 or (877) 596-5705

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Amended Regulations: Compensation for Physical Injuries or Sickness – Income Exclusions

The Internal Revenue Service put forth final regulations, effective January 23, 2012, addressing taxpayers receiving money damages arising from personal physical injuries or physical sickness and also taxpayers paying these damages. The changes implemented have been put in force through Treasury Decision 9573 revising IRS Reg. §1.104-1(c) regarding the income exclusion under IRC §104(a)(2). The revised regulation removed the tort type injury test for determining whether damages could be excluded from taxable income and also clarified the application of emotional damages.

The revised regulations deleted the requirement that money damages received from a legal suit, action, or settlement agreement would only be excluded from gross income if based upon a tort or tort type rights. Originally, the tort-type injury test was put forth in attempt to distinguish money damages received from personal injury as opposed to money damages received based upon another cause of action such as breach of contract.

Subsequently, through specific legislative and judicial developments, there is no longer a need to base the §104(a)(2) exclusion on tort cause of action and remedy concepts. Discussed in the preamble of the final regulations, the IRS cites both Commissioner v. Schleier, 515 U.S. 323 (1995) and the revisions adopted by Congress in 1996 as justification for removing the tort test. As a result, the new regulations now provide that the “exclusion may apply to damages recovered for a personal physical injury or physical sickness under a statute, even if that statute does not provide for a broad range of remedies. The injury need not be defined as a tort under state or common law.”

Next, Reg. §1.104-1(c)(1) clarified the circumstances under which money damages for emotional distress will be excluded from income. The revised regulations indicate that emotional distress, standing alone, is not considered a physical injury or physical sickness. However, money damages for emotional distress attributed to a physical injury or physical sickness will be excluded from income. For example, if a personal injury settlement resulted in a specific amount designated for the physical injuries and also an amount designated for the emotional distress caused by that same incident, all amounts would be excluded from income. On the other hand, if the suit was based on emotional distress only, and there was no physical injury or sickness, any award of damages would not qualify for the exclusion and would be taxable.

There is one exception noted that would allow for the exclusion of money damages related to emotional distress unrelated to any physical injuries. IRC §104(a)(2) does provide for the exclusion of money damages related to emotional distress to the extent such damages are not in excess of amounts paid for medical care related to such emotional distress.

The regulations define the term damages as “an amount received (other than workers’ compensation) through prosecution of a legal suit or action, or through a settlement agreement entered into in lieu of prosecution.”

For further discussion and explanation of the revised regulations relating to compensation for injuries or sickness, click here.

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Taxable Investments vs. Tax Exempt Structured Settlements

For individuals resolving a severe injury or wrongful death claim, there are many different investment vehicles to consider. Of course, the settlement funds resulting from such a claim are intended to compensate for a particular loss or injury unique to each case. For example, the settlement funds might be the result of an automobile injury that caused a permanent disability requiring ongoing medical treatment and countless other life changing issues. Whatever the specific case may be, it is imperative that the settlement funds provide for the needs of the individual and are not prematurely exhausted.

Recognizing the importance of protecting settlement funds resulting from an injury or wrongful death case, IRS Code Section 104 fully exempts settlement annuity payments from any taxation. Thus, when an individual receives a large settlement, a structured settlement annuity will protect the funds from premature exhaustion and maximize the investment return.

Further, when considering various investment types, one must consider such things as the risk of the particular investment vehicle, potential brokerage fees, ongoing management fees, the payment duration, and of course taxes. It is often the case, with many other investment vehicles, to assess some or all of the aforementioned fees which may or may not be fully disclosed upfront. On the contrary, structured settlement annuities will not reduce the investment return by imposing such fees.

Resolving an injury or wrongful death case with a tax-exempt structured settlement annuity not only provides guaranteed payments, but also maximizes the returns. To further illustrate the significance of the tax-exempt benefit see the chart below. The first column lists example rates used for a tax-exempt settlement annuity. The remaining columns list the higher taxable yield needed to produce the same return as the corresponding tax-free settlement annuity rate; depending on an individual’s applicable tax bracket. For example, for an individual in the 28% tax bracket, it would take a guaranteed 8.33% taxable yield to match a 6.0% tax-exempt annuity.

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CMS Announces New Conditional Payment Option Available in 2012

CMS has announced the implementation of another conditional payment option, available in February 2012. The “Self-Calculated Final Conditional Payment Amount” option is only available for liability insurance settlements involving a physical trauma based injury where the settlement is $25,000 or less and no further treatment is expected. The beneficiary or his representative will calculate the amount of Medicare’s conditional payment using information from the Medicare Secondary Payer Recovery Center (MSPRC), the MyMedicare website or other available claims information. The amount will be submitted to the MSPRC and if approved as accurate, the MSPRC will respond with the final coditional payment amount within 60 days. The beneficiary then has 60 days after Medicare’s response to settle in order to lock in the final amount.  Complete instructions will be posted on the MSPRC website by January 15, 2012. CMS notes that this is only an “initial step” to providing conditional payment amounts prior to settlement.  It will be intersting to see what develops from here.  For more information please visit

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The Structured Settlement Professional – An Invaluable Advocate to the Injured Person

The role of the structured settlement professional is to work with the attorney and injured party to ensure their financial needs and desires will best be met. In the wake of a potentially life altering event, a structured settlement professional is able to assist in negotiations and provide options and resources to the injured party in trying to effectively resolve the case. There is no more powerful description of what a properly structured settlement provides, than that given by a real life example.

Published in the Defense Research Institute’s October issue of For the Defense, the American Bar Association (ABA) President, William T. Robinson III, describes a specific case wherein a structured settlement was used. Describing his representation of a terminally ill client, Mr. Robinson’s article exhibits how a structured settlement provided the peace of mind and security his client desperately sought.

To read the article, please click here.

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In many regards, the advantages of a structured settlement for a plaintiff are unparalleled. A structured settlement ensures a stream of income that provides for the injured party’s needs as opposed to receiving one lump sum vulnerable to premature depletion. There are many more benefits of using a structured settlement. Larry Swedroe summarizes the major benefits of a structured settlement in an article published through Click here to read more.

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CMS launches WCMSA Web Portal


On November 29, 2011 CMS announced the launch of its Workers’ Compensation Medicare Set-Aside Web Portal that allows for the entry of WCMSA Allocation proposals online. The site allows those involved in the WCMSA process (Attorneys, Medicare Beneficiaries, Claimants, Insurance Carriers and WCMSA Vendors) to enter and track case information directly on the site. The ease of navigating the site is a blessing. The “How to…” tab is especially user friendly. Let’s all hope this process improves response time and allows the focus to shift on clarifying the rules surrounding Liability Medicare Set-Asides!




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Formatting your structured settlement payments

Often we are asked questions about how and when the injury victim can receive payments from the Prudential’s and MetLife’s of the world.  The answer to that question is very appealing: “you tell us.”  One of the advantages of the structured settlement product is the flexibility it provides to the payee.  You can choose to take your payments in the form of a lump sum, multiple lumps sums, monthly payments, quarterly payments, semi-annual payments, annual payments, and even once every certain number of years!  You also have the choice to receive the annuity payment for life or just for a guaranteed duration of time, or a combination of the two.  This “combo” format is the most popular selection amongst our clients.

If you have questions about how to format your future periodic payments, please call us toll-free for a free consultation at (877) 596-5705.

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