Factoring of structured settlement annuities has become an important issue for structured settlement professionals and trial lawyers. The issue got a lot of attention after the Washington Post wrote about the sale of structured settlement annuities in the Baltimore lead paint cases. Host Mark Wahlstrom raises the question whether these structured settlements could have been protected if they had been paid into a trust. Guest Chris Foregger discusses the factoring concern and how a trust can help in this report.
Foregger says that the most successful settlements he sees include a trust. The trust is a means of preventing factoring, but the trust provides added benefits. A professional advisor in a fiduciary relationship with the settlement client is involved and can provide education and information to the client. The trust and a corporate trustee “can help the settlement plan reach its intended purpose.”
The trust can help in other ways, including dealing with life changing events that happen to clients. Someone who was competent at the time of a settlement may later become incompetent. A corporate trustee administering a trust can react to changes in a client’s life and make distributions accordingly.
Foregger also points out that it is easy for a trust company to manage a settlement that includes annuity proceeds as well as a pool of money being managed by the fiduciary to take care of cash needs that might arise for a client. Foregger says that Capital First has a number of trusts that involve funds that are paid in from structured settlements. There are a number of possibilities for handling the funds and paying them out to clients. Foregger says he has never had the experience of a Capital First client factoring a structured settlement.
Chris Foregger is the President of the Capital First Trust Company in Greater Milwaukee. The company has handled over 2,000 settlement trusts since its creation. The Legal Broadcast Network is a featured network of Sequence Media Group.