The Academy of Special Needs Planners Presents: Creating the Team & Managing Relationships Presented by: Jason D. Lazarus, J.D., LL.M., MSCC June 15, 2011

Academy of Special Needs Planners Presentation for The Settlement Team Creating the Team & Managing Relationships Jason D. Lazarus, J.D., LL.M., MSCC 1500 E. Robinson Street Orlando, FL

Overview

How is SNSP different? Settlements are high pressure Time constraints – needs to be done yesterday 3 rd party dictating terms (the defendant) Court approval issues Injury victims are just different!

How is SNSP different? Have to be well versed in multiple disciplines: Medicaid/SSI Medicare Secondary Payer Compliance Guardianship Lien resolution Taxation of Damages Qualified Settlement Funds Structured Settlements

How is SNSP different? Have to manage the “settlement team” PI lawyer Medicare set aside consultant Lien resolution specialist CPA Tax lawyer (taxation of damages expert) Structure broker/settlement planner Financial advisor AND Yourself, SNSP attorney

SNSP Goals  Protect injury victim’s public benefits  Help transition to post settlement life  Assemble settlement planning team  Consult as to the “form” of settlement  Assist trial lawyer successfully conclude settlement  Help implement a proper settlement plan

SNSPDeliverables

What Does a SNSP Attorney Provide? Expert advice & guidance on proper legal techniques for PI atty & settlement planners Guardianship and Probate services Opinion letters

What Does a SNSP Attorney Provide? Trust drafting * SNT * MSAT * MSA/SNT (dual eligible) * SPT *QSFs Court Approval Estate planning Services

SETTLEMENT TRUSTS Trust Primary Features When To Use  Settlement Trust/ Investment Trust Provides spendthrift protection taxable payments plus liquidity and flexibility Timing and/or amounts of future financial needs are unpredictable or event contingent  Special Needs Trust Preserves SSI & Medicaid Eligibility To prevent losing SSI & Medicaid Benefits  Medicare Set-Aside Trust Preserves Medicare Eligibility Medicare Beni or reasonable expectation  468B – Qualified Settlement Fund “Holding Tank” - Allows for “cash” settlement but avoids CR Need to obtain funds from D immediately & need time to plan

Types of Fees Normal fees for services Expert fees Consulting Fees Opinion letter – flat fees or hourly

The Team

Team Members – General Considerations Determine necessary team members Assemble the team early on in process Set reasonable expectations with everyone Explain timing issues Make sure everyone understands their role

Team Members - Trial Attorney Is part of the TEAM Your primary referral source for SNSP work Starts the process – client referral Has the relationship with the client (trust factor) Provides initial intake Must be walked through the entire process

Team Members - Trial Attorney MANAGING THE RELATIONSHIP Keep in mind 1.Time Crunch (why?) 2.Ego 3.Tension between trial attorney & client 4.Disharmonious relationship with defense counsel 5.Referring attorney dynamics

Team Members - Trial Attorney Understanding Trial Attorneys Professional litigator – trained to listen & discern sincerity If you write it down, they will keep it and it can haunt you Don’t ever “wing it” – if not sure, research and get back to atty Fear being sued for malpractice Marketing tip – play off this fear (prevention of malpractice) Want to transfer liability to YOU

Team Members - Trial Attorney Understanding Trial Attorneys Want to be educated, but telling them once is never enough Be a problem solver for trial attorney Check your own ego at the door Remember you need to help them settle the case the right way So THEY can get paid

Team Members - Trial Attorney Marketing Join state TLA & local TLA Publish List Serve Seminars Become the trial lawyer’s “go to” settlement lawyer

Team Members - Lien Resolution A powerful resource to assist in resolution of difficult cases Fee based service provider (can be flat fee or contingency) May have existing relationship with trial attorney Probably not a referral source

Team Members - Lien Resolution Why do you need a lien resolution partner? Medicare Medicaid ERISA Military Hospitals & other providers Private Health

Team Members - Medicare Set Asides Need allocation services AND administration Allocation services are flat fee MSA Admin Can be MSAT Custodial Agrmt Potential Referral source for “dual eligible” clients

Team Members - Medicare Set Asides Allocations – selecting a partner - considerations LMSA experience Plaintiff or defense bent? Reduction methodologies Atty fees Apportionment

Team Members - Medicare Set Asides Marketing Organizations Join NAMSAP Participate in list serve Attend annual meeting Consider getting MSCC designation

Team Members – CPA/Tax Atty Taxation of Damage Issues Origin of claim issues (legal mal) 104(a) (PI, WC or Disability) Taxable damages (discrimination, etc.) Confidentiality – Amos Advice on tax efficient strategies

Team Members - Structured Settlements Good potential referral source for business Gets into cases early What can they refer? SNT MSAT QSF May have very close relationship with plaintiff counsel Trust factor with attorney AND client

Team Members - Structured Settlements MANAGING THE RELATIONSHIP Keep in Mind The good, the bad & the UGLY Structures are not inherently bad Annuity brokers (one trick pony) vs Settlement Planners Over structuring Established relationships with trust companies and other providers

Team Members - Structured Settlements SNSP STRUCTURED SETTLEMENTS USES fund MSA Why? SNT Irrevocable assignment May lead to QSFs

Team Members - Structured Settlements Marketing NSSTA SSP List serve Surviving the relationship

Team Members - Trust Company Experience working with PI victims Handle settlement trusts, MSATs & SNTs Accept smaller settlements

Intake Considerations

Intake - SNSP Pre-Settlement Obtain as much info about case Plaintiff/Defendant Type of case Injuries Get a copy of Life Care Plan and Economic Report Why?

Intake - SNSP Pre-Settlement Copy of financial needs analysis Copy of MSA allocation Lien info Hint: Get cozy with staff/paralegals

Timing Issues

Date of Loss / Injury Retain Lawyer / File Suit Trial/Arbitration/Settlement Resolution Possible Qualified Settlement Fund Lien Resolution Distribution to Client Typical Best Practice Settlement Continuum

Timing Issues - Managing Have to train referral sources Explain critical issues in terms of timing Financial decisions could impact planning techniques Tool to avoid timing problems (QSF)

Managing the Relationship Injury Victim

Managing Injury Victims Understanding the Client Haven’t won the lottery – tragic accident Generally unsophisticated Total trust and dependence on trial atty Usually deeply in debt Marriage and relationships a mess Many fighting depression Need to know you are there to help

Managing Injury Victims Understanding the Client If client isn’t eligible for needs based benefits Consider: Anecdotal evidence suggests most injury victims spend down their settlements Need to address this issue head on with the client Hint: solution is settlement preservation trust

Jason D. Lazarus, J.D., LL.M., MSCC QUESTIONS ?