Settlement Trusts By Christi Fried Continental Trust Srvcs Llc


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Settlement Trusts By Christi Fried Continental Trust Srvcs Llc

  1. 1. 2010 Settlement Professionals Inc. 01/25/2010 Continental Trust Services, LLC
  2. 2. <ul><li>Settlement Trusts are an excellent option used in conjunction with a structured settlement annuity to provide access to funds for unexpected changes in the future </li></ul><ul><li>The structured settlement annuity provides the advantages of rated ages and longevity for the life of the plaintiff </li></ul><ul><li>Many vendors offer Settlement Trusts with options to create a unique settlement for the needs of each individual family </li></ul>01/25/2010 Continental Trust Services, LLC
  3. 3. <ul><li>Professional Trustee </li></ul><ul><ul><li>Accounting and preparation of income tax returns </li></ul></ul><ul><ul><li>Fiduciary responsibilities </li></ul></ul><ul><ul><li>Spendthrift protection </li></ul></ul><ul><li>Disbursements </li></ul><ul><ul><li>Replicate period certain and lump sum payments </li></ul></ul><ul><ul><li>Discretionary access to funds </li></ul></ul><ul><ul><li>Assets held in separate accounts </li></ul></ul><ul><ul><ul><li>Define Investment Instructions </li></ul></ul></ul>01/25/2010 Continental Trust Services, LLC
  4. 4. <ul><li>Duty to administer Trust by its terms </li></ul><ul><li>Duty to account and furnish information </li></ul><ul><li>Duty of confidentiality </li></ul><ul><li>Duty of loyalty </li></ul><ul><li>Duty of impartiality </li></ul><ul><li>Duty to avoid conflicts of interest </li></ul><ul><li>Duty to protect against adverse trust appointments </li></ul><ul><li>Duty to control and preserve trust property </li></ul><ul><li>Duty to make property productive </li></ul><ul><li>Duty to keep trust property separate </li></ul><ul><li>Duty of delegation </li></ul><ul><li>Duty of Trustee’s special skills </li></ul>01/25/2010 Continental Trust Services, LLC
  5. 5. <ul><li>Good communication, accounting, organization and detective skills </li></ul><ul><li>Attention to detail </li></ul><ul><li>Understanding of legal, tax, insurance and investment issues </li></ul><ul><li>Good health administration </li></ul><ul><li>Effective coordination </li></ul>01/25/2010 Continental Trust Services, LLC
  6. 6. <ul><li>Define Trust Property </li></ul><ul><li>Investment Instructions </li></ul><ul><ul><li>Assets are held by a Custodian (bank or other entity chartered to accept deposits) </li></ul></ul><ul><ul><li>Investment advisors are licensed to trade bonds </li></ul></ul><ul><ul><li>Treasury bonds are backed by the full faith and credit of the United States government </li></ul></ul><ul><ul><li>Municipal bonds chosen are investment grade, non-callable and insured by a monoline insurer </li></ul></ul>01/25/2010 Continental Trust Services, LLC
  7. 7. <ul><li>Guarantees the payment of principal and interest on a bond if the issuer defaults </li></ul><ul><li>Purchased through a onetime payment of a premium at the time of the bond closing </li></ul><ul><ul><li>The process begins with the issuer submitting documentation for review </li></ul></ul><ul><ul><ul><li>Official statement </li></ul></ul></ul><ul><ul><ul><li>Financial statement </li></ul></ul></ul><ul><ul><ul><li>Bond documents </li></ul></ul></ul><ul><ul><li>If the issue qualifies then, the policy may be purchased by direct purchase or elective bidding </li></ul></ul><ul><ul><ul><li>Direct purchase – issuer purchases the insurance policy directly from an insurer </li></ul></ul></ul><ul><ul><ul><li>Elective bidding – each bond dealer assesses whether insurance will enhance the bond then, the bond dealer pays for the insurance policy </li></ul></ul></ul>01/25/2010 Continental Trust Services, LLC MONOLINE INSURANCE COMPANIES AMBAC Assurance Corporation Financial Guaranty Insurance Company (FGIC) Assured Guaranty Corp. (AGC) National Public Finance Guaranty Corp. (MBIA) Assured Guaranty Municipal Corp. (FSA) Syncora Guarantee CIFG Assurance North America, Inc. Berkshire Hathaway Insurance
  8. 8. 01/25/2010 Continental Trust Services, LLC
  9. 9. <ul><li>Assets are kept separate and are uniquely identified by individual tax identification numbers </li></ul><ul><li>Executed trust document is required </li></ul><ul><li>Investment profile defines that investments are limited as defined in the trust document </li></ul><ul><li>Review of each distribution request prior to releasing funds </li></ul>01/25/2010 Continental Trust Services, LLC
  10. 10. <ul><li>Member of Securities Investor Protection Corporation (SIPC) </li></ul><ul><ul><li>Replacement of missing securities and cash up to $500,000 </li></ul></ul><ul><ul><li>Limit of $100,000 for cash </li></ul></ul><ul><li>Account protection in excess of SIPC limits from Lloyd’s of London </li></ul>01/25/2010 Continental Trust Services, LLC
  11. 11. <ul><li>Is the payment listed on the distribution schedule pre-tax? </li></ul><ul><li>What accommodations can be made via language in the trust to plan for college or if the child does not go? </li></ul><ul><li>Will the payment listed in the quote be the payment mailed to the beneficiary if no other changes are made during the life of the trust? </li></ul>01/25/2010 Continental Trust Services, LLC
  12. 12. <ul><li>Discretionary </li></ul><ul><ul><li>If the Beneficiary requires funds early is this possible? </li></ul></ul><ul><ul><li>How will that change the distribution payment? </li></ul></ul><ul><li>Disbursements are made directly to the Beneficiary from the Custodian </li></ul><ul><li>Will Continental Trust do a conference call with the family to help plan the flexibility of the trust? </li></ul>01/25/2010 Continental Trust Services, LLC
  13. 13. <ul><li>Trustee fees </li></ul><ul><li>Settlement consultant referral fee </li></ul><ul><li>Other (accountant, attorney, investment advisor, fidelity bond, etc.) </li></ul><ul><li>Is the quote net fees? </li></ul><ul><li>What are the fees? </li></ul><ul><li>Can the fees be disclosed to the court? </li></ul><ul><li>How does the obtaining of the bond work if the court requires a bond? </li></ul>01/25/2010 Continental Trust Services, LLC
  14. 14. <ul><li>Grantor </li></ul><ul><ul><li>Plaintiff </li></ul></ul><ul><ul><li>Defendant </li></ul></ul><ul><ul><li>Court </li></ul></ul><ul><li>Trustee </li></ul><ul><ul><li>Invest assets within the investment instructions </li></ul></ul><ul><ul><li>Perform administrative services </li></ul></ul><ul><ul><li>Compensate others such as; attorneys, investment advisors, brokers </li></ul></ul><ul><ul><li>Pay taxes and provide loans to the beneficiary </li></ul></ul><ul><ul><ul><li>Are the taxes and tax filing fees paid from the trust? </li></ul></ul></ul><ul><ul><ul><li>When are the taxes due on the trust? </li></ul></ul></ul><ul><ul><ul><li>Can you provide a letter estimating taxes? </li></ul></ul></ul><ul><ul><li>Select Custodian of the assets </li></ul></ul>01/25/2010 Continental Trust Services, LLC
  15. 15. <ul><li>Beneficiary </li></ul><ul><ul><li>Plaintiff </li></ul></ul><ul><ul><li>Family Members </li></ul></ul>01/25/2010 Continental Trust Services, LLC
  16. 16. <ul><ul><li>Intentionally Defective Grantor Trust provides that the income of the Trust is taxed to the Grantor and the assets of the Trust are distributed to the Beneficiary </li></ul></ul><ul><ul><li>A contractual arrangement whereby property is transferred from the Grantor to the Trustee to hold the property for the benefit of the Beneficiary </li></ul></ul><ul><ul><li>Type of Trust that cannot be annulled, changed, or terminated by the Grantor </li></ul></ul>01/25/2010 Continental Trust Services, LLC
  17. 17. <ul><li>111 Beach Street, Suite 3D </li></ul><ul><li>Boston, MA 02111 </li></ul><ul><li> </li></ul>01/25/2010 Continental Trust Services, LLC