I. WHAT IS A STRUCTURED SETTTLEMENT ATTORNEY, AND WHAT QUALIFIES AN ATORNEY TO HOLD THEMSELVES OUT AS AN ATTORNEY IN The INDUSTRY SURROUNDING THE Transfer OF STRUCTURED SETTLEMENT PAYMENT RIGHTS
A structured settlement attorney is simply a lawyer that practices in the area of addressing the multitude of issues that arise out of the settlement of a personal injury claim that is settled by an agreement to make payments to the injured person, or their heirs “over time”. As once a plaintiff in a personal injury action agrees to accept both present and future compensation for all injuries sustained in the underlying personal injury claim, that plaintiff has entered into a what is commonly referred to as a “structured settlement”. By entering into such a settlement, a plaintiff will generally receive not only a certain immediate payment of money at the time of settlement, but also a “right” to receive future money from either the defendant insurance company that settled the claim directly with the plaintiff, or a separate insurance company that has entered into its own agreement with the initial defendant insurance to make the “future payments” to the plaintiff on behalf of the original insurance company.
As such, the “structured settlement” then becomes the “tip of an iceberg” of what amounts to a “legal minefield” for an entire new and different “class” of individuals and companies that interestingly enough have no direct connection whatsoever to the original “structured settlement” including the original plaintiff, their heirs, or the original defendant insurance company. This is because a “structured settlement” creates a “payment right”. As an actual “right” to receive future payment guaranteed by either one or perhaps even two separate insurance companies has tremendous “value” in and of itself to not only the original plaintiff, but also third party investors, other insurance companies, the U.S Government, and the Internal Revenue Service, an entire financial industry has developed around the creation, purchase, right to sell, sale, and “secondary market” investment potential of an individual’s “structured settlement payment rights”. In fact, the “investment market” for a plaintiff’s “structured settlement rights” has become such a “juggernaut”, that a Federal Model Act was created in 2001 to govern how a person’s “future payment rights” arising out of a “structured settlement” can be transferred, purchased, sold, and the possible federal tax consequences that can result from such a transaction, as well as 47 states have also since 2001, passed statues in accordance with the federal act, to “regulate” what is a today a “multi-billion” dollar industry.
II. What Defines a STRUCTURED SETTLEMENT attorney
To be a “structured settlement attorney”, an attorney must begin by being well versed in multiple areas of law that include, but are not necessarily limited to the following:
(1) Insurance Law;
(2) Constitutional Law;
(3) Rules of Contract – both State and Federal;
(5) Rules of Evidence;
(6) Rules of Civil Procedure; and
(7) Tax law.
In addition, to be a truly experienced “structured settlement attorney”, an attorney must also be skilled in both transactional, as well as litigation matters. As every contract entered into between any two parties for the sale or “factoring” of structured settlement payment rights must also be approved by a Court of Law. Where either a Superior, District, or Circuit Court Judge, must find that the sale of the “structured settlement payment rights” is actually in the best interests of the person wishing to sell their payment rights.
Given the plethora of issues that each transaction involves, combined with the unique “cross-over” that exists between the “private sector” and the “Judiciary” each and every time a person wants to enter into a contract to sell their payment rights, very few attorneys are actually genuinely qualified to assist in every aspect of the “secondary market factoring industry”. In fact, there are only a handful of attorneys in the nation that genuinely meet the qualifications of a true “structured settlement attorney”, as such individuals must not only be well versed in all of the above referenced areas of law, but also the industry as a whole. Separately, such an attorney must also be aware of how to underwrite a file to secure payment for investors, as well as understand the risks of underwriting.
Without that combination of transactional, litigation, and overall industry experience, one cannot properly represent the interests of sellers, buyers, obtaining court orders, bankruptcy trustees, and investors, in evaluating the potentials and pitfalls that underlie each and every transaction involving a transfer of a single individual’s “structured settlement payment rights”.
III. EUGENE A. AHTIRSKI, ESQ – A TRUE STRUCTURED SETTLEMENT ATTORNEY
There are only a handful of attorneys in the nation that truly meet the qualifications of a “structured settlement attorney”. Among that very short list is Eugene A. Ahtirski, Esq., however, is such an attorney. Mr. Ahtirski has personally been involved in over 7,000 court ordered transactions for the sale of structured settlement “payment rights” representing both purchasers, and sellers, as well as over 2,000 pre- Federal Act “assignments” of structured settlement “payment rights”, exclusively representing seller’s interest in each of those transactions.
In addition, Mr. Ahtirski is an expert consultant in “dissolution proceedings”, where the present day value of a structured settlement must be “evaluated” and “valued” for community property division purposes. Finally, Mr. Ahtirski, has also represented the interests of investors in the purchase of court-ordered sales of structured settlement payments by underwriting of the risk of the investment for the investor, as well as the issuance of opinion letters regarding the same.
That being said, and excepting the rare individuals such as Mr. Ahtirski, the term “Structured Settlement Attorney” may actually be too broad of a description to use when attempting to actually define and clarify the various roles that an attorney can play in the extremely diverse, complicated, and multi-faceted industry commonly known as the “Secondary Market for the Sale of Structured Settlement Annuity Payments” (“secondary market”).
IV. DEFINITIONS AND ROLES OF THE VARIOUS TYPES OF ATTORNEYS THAT PRACTICE IN SPECIFIC AREAS OF THE STRUCTURED SETTLEMENT SECONDARY MARKET INDUSTRY
To be completely candid, as most attorneys do not possess the knowledge, skill, experience, or the simple desire, to participate in every aspect of the “secondary market” as a whole, attorneys that choose to provide legal services within the industry will generally base their practice around a specific “niche” within the secondary market.
Plus, given the size of the industry, there are number of very precise areas that attorneys can actually focus on to create distinct areas of services catering to the needs of the different entities and individuals that make up the industry as a whole. The following are some definitions that can be used to aptly describe and define various roles attorneys have centered their practices around:
Independent Professional Advisor (“IPA”) – Under all 47 of the existing ‘Structured Settlement Protection Acts” (“SSPA’S”), an IPA is generally defined as an adviser engaged by a claimant or payee to render advice concerning the legal, tax, or financial implications of a structured settlement or a transfer of structured settlement payment rights. The IPA can either be an attorney, certified public accountant, actuary, or other licensed professional in the financial services industry.
Additionally, all SSPA’s provide that a “seller” must be advised of the right to seek the services of an IPA, and either obtain such services, or waive the right to do so in writing. Some states even go as far as to require the services of an IPA no matter hat in all transactions. These states include: Delaware, Florida, Massachusetts, Michigan, Minnesota, North Carolina, and Ohio.
Plus, the adviser’s compensation for rendering independent professional advice is always independent of, and not affected by the occurrence or success of the transfer; and in many states also the responsibility of the purchaser to pay for the services of the IPA, no matter what. Examples of attorneys that hold themselves out as IPA’s can be located at the following links:
Further, given that the industry encompasses a Nation-Wide market, an attorney knowledgeable in the area of such transfers, can properly assist a buyer in “shopping” for the best deal, as well as advise a seller of the risks involved in entering into such a transaction, plus scrutinize the proposed use of funds that the seller represents as the basis for entering into the transaction. Much like the same role that Suzie Orman plays, when giving advice, supporting, or talking people out of the use of money.
Such advisors in fact, may well NOT need to be licensed to practice law throughout the United States, in order to provide independent professional advice on such a transaction, if in fact they are knowledgeable about the industry, “zealously” represent the interests of their client, to wit, the seller, plus refrain from filing any documents in a court in any state where they are not licensed, without first associating in a local state counsel to co-file the documents.
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