the forge process
Forge focuses on a planning process rather than selling a specific product. Until our professional planners and staff are able to go through a fact finding exercise and get to know the plaintiff and their family, we are not able to determine what products can be implemented to help address their wants, needs and fears.
The below illustration is a summary of the overall process:
Forge: Your Settlement-Planning Advocate
Forge helps clients understand and plan for the complicated issues associated with Medicaid, Medicare, asset protection, estate planning, debt elimination/reduction, housing/healthcare, and more. Our settlement consultants are well versed in government benefit preservation and tax issues. We understand the importance of these benefits to our clients’ futures and how this planning interfaces with wants, needs and fears.
By giving the plaintiff the ability to view abstract dollar amounts in terms of their tangible effect on the plaintiff’s life and future, Forge helps prepare clients for these decisions before it’s time for them to be made.
Seeking top-notch providers and forcing competition in every area allows Forge to provide balanced and holistic solutions. Our Competitive Pricing AnalysisSM and layering of multiple life companies and products adds additional safety to the inherent protections already provided through our structured planning; however, the emphasis is always on process, not product.
Determining a Suitable Asset Allocation
Deciding on the amount and type of structured products is an important step in the process. Allocation to a tax-free structured settlement in compliance with the 1982 Periodic Payments Act must be determined first so that the settlement documents can be prepared and checks can be requested from the defendants. Choosing an amount to place in a tax-free structure early is vital because structures are a valuable planning resource available only at the time of settlement. Before checks are written and final documents are prepared and signed, this decision must be made. Balance is important—you never want to structure too much.
The non-structure portion of your settlement is also extremely important. Forge will assist in finding the right providers to handle each of these important responsibilities. From medical custodial accounts to wealth managers, we are here to be your advocate.
A balanced settlement plan mitigates risk and ensures long-term security with adequate liquidity for unforeseen circumstances—because life happens.
A structured settlement provides a guaranteed, long-term, tax exempt payment stream. Normally, the structure allocation is considered a foundation/safety net of a more integrated plan. When Congress amended federal tax code, IRS Code §104(a)(2), to promote the use and integrity of structured settlements, it explicitly provided that 100% of every structured settlement payment is exempt from federal and state income tax. Thus, the rate of return of the structure is not affected by ongoing fees or expenses and is never subject to income tax. This flexible option allows for you to design any combination of future payments tailored to meet individual needs.
Suitability and Government Benefits Planning
When compliance with government legislation and/or CMS (Centers for Medicare and Medicaid Services) is needed, our knowledge of the requirements ensures an understanding of the appropriate compliance vehicles. Once the vehicles are selected, the focus turns to the complex funding methods, providers and products that ultimately finalize the plan.
Forge initiates an issue-spotting process to review past, current, or the potential for future government benefits; once an analysis has been completed, our national network of vetted attorneys provides the client with local expertise to perfect a suitable plan.
If after a thorough review we determine government compliance is not an issue, our efforts turn to the basic wants, needs, and fears of the client and the appropriate legal entities and/or product providers to solve their problem or embrace the need. Forge always forces competition to ensure the client comes out on top.
Does your situation require a trust? If so, what type? If a trust is needed, it is important to first formulate a legal strategy, then determine who can manage this type of trust. If a trust is not needed, the services of a wealth manager are necessary to properly prepare for future needs.
Competitive Annuity Pricing
Once the structured annuity amount and type of future periodic payments are chosen, our Competitive Pricing Analysis is performed to achieve the best possible benefit with the most security.
If a lifetime benefit is chosen, through a process called Medical Underwriting, the life companies will review medical records and will determine if the beneficiary’s life expectancy is potentially reduced by ongoing medical conditions. Upon review, the life company will subsequently assign a “rated age.” The rated age is then used during pricing to achieve a more competitive rate for any lifetime benefit.
During competitive pricing, the annuity plan is broken down into smaller pieces and each piece is priced across the board with every available A+XV or higher rated life market, and companies are forced to compete with each other for the investment opportunity. The final plan will usually contain components from various life companies to maximize return and security and often compares other annuities to make sure the final product choice is the most suitable plan.
Throughout this process, our primary goal is to achieve every possible advantage for the plaintiff and family. Forge works exclusively for plaintiffs and is directly appointed to accomplish this work.
Choosing a Trust Attorney
Once the allocations are determined, the other levels of planning are accomplished. It will be of vast importance that the proper trust attorney is hired if a trust is deemed necessary. He or she should be an expert specializing in the required field (i.e. special needs, asset protection, estate planning) so that you can be confident the best possible trust document will be produced.
As a part of the planning, the trust attorney will work with the family to decide on variables such as co-trustee, trust advisor, trust protector, beneficiaries, and work out various planning issues.
The trust attorney will also review the necessity of other trust vehicles or legal documents such as irrevocable life insurance trusts, wills, probate vehicles, etc. It is only after this process is completed that a family should look for the appropriate corporate trustee.
Choosing a Trustee
When interviewing trustees, it will be necessary to ensure the chosen trustee or wealth manager will allow for the structure to be recognized as an asset class. This avoids over-allocating and ensures that no fees are charged for assets held outside the trust (such as a structure). Reducing management fees through this balance directly impacts the bottom line rate of return for the overall plan.
The recovery from a settlement is not the type of money that should be—or, in the case of a minor, can be—exposed to significant risk. In other words, conservative investments with lower risk should be implemented. Additionally, limitations on risk associated with statutes in many states and the court approval process will eliminate many investments as options beyond only the most conservative. Understanding the application of the Prudent Investors Act explains the safety of a trust.
Choosing a Wealth Manager
Because every settlement should involve a cash component, a professional wealth manager can assist with planning for your estate or investing your assets based on your individual wants and needs. The wealth management professional should be aware of the unique benefits regarding tax-free structures and other annuity products.
For known and recurring care expenses and guaranteed income, a structure should be implemented to work with the cash portion of your settlement. In today’s market, the returns are positive and more stable than comparable low-risk investments. By placing a structure within the fixed-income allocation, you potentially reduce your overall risk and increase the performance of your fixed-income allocation because of lower fee and tax exposures. The selected asset manager should recognize the structure allocation to avoid over-allocating in this area.
In the creation of a risk-averse investment strategy it is important that enough cash is reserved to accommodate for currently known cash needs and to create a buffer for future, unforeseen needs.
Achieving Court Approval
Forge has a national reputation of only working in the best interest of plaintiffs, giving courts confidence that our planning is completed in the best interest of the minor, not a particular financial or insurance company. There is a reason plaintiff attorneys introduce our firm: experience.
For the approval process we complete the following steps:
- Provide language for the Release, Petition and Order related to the coordinated approach that preserves the applicable tax exemptions and helps protect eligibility for provided and potential healthcare services.
- Prepare description of our objective and fully disclosed planning process.
- Submit complete summary of financial ratings for all product providers, and a summary of proposed contracts/policies/trusts to be put in place.
- Present curriculum vitae for each involved professional and planner.
- Provide copy of professional licenses.
- Make available supplemental information explaining interface between periodic payments and a special needs trust.
- Provide additional credentials supporting Forge as an expert for plaintiffs.
As a part of Forge’s service to our clients, we provide ongoing support and direct accountability. Forge maintains records of policy issuance and all document records related to the case as well as detailed correspondence records tracking the progression of the planning process. Forge serves as an ongoing liaison between trustee, trust attorney, plaintiff’s attorney, and the family as needed.
Additionally, we make ourselves available as a single point of contact for general maintenance needs such as:
- Beneficiary designation changes
- Address changes
- Establishment of and changes to direct deposit
Forge is here for you and your family’s needs. Call us today at 866-68-FORGE (866-683-6743).