IFS obtains a private letter ruling on taxable claims, non-qualifed business.

In some welcome news for the structured settlement market, the IFS group, Integrated Financial Settlements, announced last week that they had obtained a private letter ruling from the IRS on the use of a Non-Qualified annuity and assigment to resolve an employment claim. To those of us who do a lot of non-qualifed annuity work, this is big news. To those of you who don't do a lot, it probably comes as a surprise that this is the first PRL on taxable damage cases.

As many of us know, Allstate has always been the industry leader in Non-Qualified annuity work and has pioneered over the years the use of non-qualifed assignments on environmental cases, wrongful termination, defamation, sexual discrimination and other taxable damage cases. A lot of that work took place under the watchful eye and guidance of then Allstate employee John McColluch, who created a lot of the concepts and programs on taxable cases that many people take for granted. It is no surprise then that IFS getting this private letter ruling occurred a year or so after John left Allstate and went to work for IFS. John now holds the position of Vice President of Market development for EPS, one of the IFS companies, and he co-authored the private letter ruling on structuring taxable damage cases and using a non-qualified assignment to transfer liability for future payments. 

As I've been saying on this blog and my various talks around the country, the single biggest area of opportunity for the structured settlement industry is taxable damage cases. We have done a multitude of podcasts on this issue, largely on molestation cases, which are taxable, environmental cases, wrongful termination and age discrimination and other work place torts and in each case we have extolled the virtue of structuring these awards. Now with this PLR maybe some of the timid sheep of the structured settlement markets who refuse to develop non-qualified annuity contracts and assignments for use in taxable cases will get off the fence and start offering these to broker and attorneys. Really, other then Allstate, Prudential and to a lesser degree Aviva have been working to grow this area and the life markets now need to get off their hands and go after this area of business. I really wish the life markets would stop sitting on their wallets and spend the money to develop products, ideas and markets, or spring for the cost of the PLR's, necessary to grow new annuity concepts and markets. It's one of the ironies of our business that brokers like IFS, or in my case Wahlstrom & Associates and The Settlement Channel, are the companies spending large sums of money to grow the business when we have billion dollar life companies sitting nervously on the side line and wondering why the business doesn't grow.

We will be having John McColluch on Speaking of Settlements later this month to discuss this in greater detail. In the mean time you can read the IFS press release by clicking here to get a little more back ground. 

Structured sales, a languishing market.

Over on my somewhat neglected blog at Wahlstrom & Associates you can read a few of my recent thoughts on the structured sales market.

Today's post was on the increasing dominance of online marketing hustlers pushing questionable sales programs, distorting the trade name and in general planting the seeds for the potential demise of structured sales as a viable concept. Basically we are looking at a potentially huge opportunity for the settlement community to develop a new market, but it is being choked off by lack of support from the life companies and is now being over run by the former tax hustling private annuity crowd to sign up insurance agents, planners, real estate and mortgage brokers to make big money selling structured sales. You can read that post by clicking here.  

Earlier I did a post on the mortgage market collapse and it's impact on the structured sales market. What I didn't mention, but should have, in that article was that the coming slow down in real estate and mortgage business is going to create a swarm of failed professionals looking to get into the structured sales transaction business. The settlement industry and the life companies involved, Allstate and Prudential, really need to be taking a very hard look at the GA's they have appointed to sell the product and make sure they are policing the sales tactics and partnerships being created to market these annuities.

The fact is this is a market with huge potential that is still pretty much sitting on the launching pad waiting for lift off. The vacuum created by the apathy of settlement professionals in marketing this concept is being filled by questionable professionals from the private annuity, real estate and mortgage business and the consequences for the long term success of this product are pretty much hanging in the balance.  

Mark Wahlstrom featured on KFNN real estate program on structured sales

Mark Wahlstrom, President of Wahlstrom and Associates of Scottsdale, AZ and the host of The Settlement Channel was recently featured on KFNN, 1510 in Phoenix, Arizona for a full hour on Talk Real Estate. This syndicated daily real estate show is hosted by Drew Grunwald of The Red Door Group and Doug Blackwell of 1031 Exchange Partners, and the four part hour long discussion centered on the use of structured sale annuities in deferring capital gains on appreciated real estate.

Wahlstrom, who has been mentioned in Forbes, the Wall Street Journal, Vacation Homes, The Robb Report and The National Law Journal as an expert on structured settlements and structured sales, had an interesting hour long conversation with two leading real estate and 1031 exchanges experts, and talked about where structured sales, or installment sales of real estate secured with annuities fits into the the real estate investors plans. What makes this of particular interest to settlement professionals is the opportunity to have exchange professionals and real estate professionals give their views and questions on this new capital gains deferral tool.

You can listen to each of the podcasts by clicking the following links, or you can go to our podcast directory and play them from there.

Part One of the interview with Talk Real Estate.

Part Two of the interview with Talk Real Estate.

Part Three of the interview with Talk Real Estate.

Part Four of the interview with Talk Real Estate.

Structured sales, or installment sales of real estate funding with secured annuities is a method of deferring capital gains in a secure fashion that is gaining increasing popularity. This interview and our other resources on the Wahlstrom & Associates blog can assist you in getting up to speed on how it works, where it is appropriately used and whether or not it might make sense in your situation. You can contact Mark Wahlstrom via the contact page here on the Settlement Channel if you'd like to know more.