Category : IPA
By AFG Newswire
August 4, 2014
At the end of July, a San Bernardino County resident transferred his payment rights successfully to a bank based in New York, represented by attorneys based in Sacramento. And no independent professional advice to be found for the resident.
This is legal. The transferee, the structured settlement obligor, or the annuity issuer, must be from the county of original jurisdiction, in this case, it was San Bernardino County (10139.5(f)(1)).
The transfer company and their attorneys do not have to be from the county of original jurisdiction. If there is another party buying the payment stream as a recycled annuity, they do not have to be from the county of original jurisdiction as well.
The sad part here, the resident had no independent professional adviser. We have no idea what price he got for his dollar. Rates differ with different companies, especially “out-of-state” companies.
The Importance of an Independent Professional Adviser
The growth of advancing laws creates a larger arena of events that needs consideration. The importance of independent professional advice becomes greater.
The independent professional adviser is an accomplished thinker trained in performing due diligence on your behalf. In this particular case, the resident dealt with a well established law firm who’s practice areas are “workers compensation”, “personal injury”, “bankruptcy”, “labor law”, “real estate”, “business law”, “social security”, and they command a hefty price for their services.
Then there is the bank in New York. Did the resident really have bargaining power with a bank in New York that is a “full service, federally chartered savings bank serving professional service firms, law professionals, etc.”?
In addition, who was the third party mystery person? Did they buy the payment stream? Did this resident even know that angle of this whole deal?
It’s not that the resident or the “transferee” or the “payee” needed to understand the whole process, it is protection the resident needed. The resident had no idea what options were out there, the resident was unrepresented; and it didn’t have to be that way. California law provides $1,500 for an independent professional adviser.