The Braille Monitor – October 2000 Edition
by James Overholser
From the Editor: This summer we received a short article that may be quite useful to some of our readers. The author, James Overholser, is a member of the firm of Sutton, Overholser & Schaffer in Dayton, Ohio. He has practiced law for more than twenty-five years, specializing in medical malpractice and personal injury cases. He is the immediate past president of the Miami Valley (Ohio) Trial Lawyers Association. For more information about structured settlements, contact the National Structured Settlements Trade Association at (202) 797-5108 or go to <www.NSSTA.com>. This is what Mr. Overholser says
In 1986 Glen Peel's life changed forever. The Utah native was working for a farm machine company in rural Idaho. Part of his work involved anhydrous ammonia, a volatile substance. On April 19 a freak explosion caused by the ammonia left him fully blind.
It was a devastating accident--physically and emotionally. It was also damaging financially, as Glen quickly realized that his changed situation and continuing medical needs meant that he needed a stable financial settlement as never before.
He entered into settlement negotiations with the Workers Compensation Fund of Idaho. That was where he caught a break: An official suggested that, instead of taking his settlement in cash, he consider applying a large share of it to something called a structured settlement. Similar to an annuity, a structured settlement provides guaranteed tax-free payments to injured persons. Realizing the financial security and benefits, Glen agreed.
Today the settlement that he funded will provide him guaranteed monthly payments for living expenses until age seventy, with an additional payment each year to defray medical expenses. Periodically these payments are modified to take into account cost-of-living changes.
Settling for the Long Term
For more than twenty-five years I have provided legal representation to injury victims, many of them seriously disabled. Based on that experience, I have seen that, when it comes to providing sustained financial security, few alternatives are better than a structured settlement which is individually tailored to the needs of an injury victim.
Structured settlements are similar to--but better than--an ordinary annuity. The underlying idea is relatively straightforward: federal law offers financial incentives for people who put their settlement (or a part of it) into a structured settlement, which provides extended financial security. That makes injury victims less likely to require public assistance. Structured settlement payments, when properly designed, are also completely exempt from federal taxation, thus providing a clear benefit over investments in stocks or mutual funds, which are generally taxable.
The actual payment stream will be negotiated by your attorney, who with a structured-settlement professional will take into account such variables as medical and living needs and life expectancy. This way the payments can effectively help fulfill one's actual financial needs.
Indeed it's vital to have an experienced settlement consultant involved with your case. As Joe Costello, President of the National Structured Settlements Trade Association <www.NSSTA.com>, the industry trade group, says, "A licensed broker understands and can plan for unforeseen changes in medical and living needs. Often that's the crucial link to ensure extended financial security for injury victims."
Another reason to have an experienced broker work with your attorney is that by federal law the beneficiary of a structured settlement does not own the settlement annuity, which is held by a third party, and cannot accelerate the payments. That's a requirement of federal law--the idea is to keep people from spending all at once payments designed for the long term.
A great deal depends on the amount of your settlement. A small settlement might be structured for a particular purpose-- say a college education for a minor--but by itself will not guarantee a victim's financial independence. Nevertheless, with the wild fluctuations in the stock market we've seen this year, a secure investment like a structure is usually a pretty good option for disabled people.
Shoot for the Sky
And what about Glen Peel? Today, he owns Horseshoe Mountain Hardware, a successful hardware store in Mt. Pleasant, Utah, about 100 miles south of Salt Lake City.
Asked what advice he has for people who have recently become visually impaired, Glen notes, "A structured settlement was the best thing for me. This way I'm protected for life."
He adds, "As a blind person I'm still the same person I was before the accident. Once I realized that, I realized I just had to take a little different approach to the way I did things, but that I could still be successful. Don't be afraid to shoot for the sky. That's what I want the blind community to know."