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- Written by: Dennis Fordham
Structured settlements ensure that the beneficiary receives his or her payments gradually over their expected lifetime.
Often persons receiving the injury awards are already receiving needs-based government benefits, such as SSI and/or Medi-Cal.
In such cases, a special needs trust is usually established to receive all payments that would otherwise go directly to the beneficiary. The structured settlement and the special needs trust work together. Let us examine how this works.
A structured settlement turns a lump sum settlement award into a secure and steady stream of income for the disabled person’s lifetime.
Typically, some, or all of the settlement award is used to purchase an annuity contract that provides a steady stream of income.
When a special needs trust is in existence, the income payments are paid to the trustee of that trust and not to the beneficiary, so as to protect the needs-based government benefits.
The risk with investing the entire lump sum award into a structured settlement is the inflexibility of the structured settlement and the eroding effect that inflation has on fixed incomes.
If money is needed to make a large purchase or to pay for an emergency expense, the structured settlement is unavailable, except to the extent of the fixed payments – which may not be enough.
Also, the rising cost of living eats away at the purchasing value of the structured settlement’s fixed income payments.
Any modest index for inflation doesn’t usually keep pace with inflation, which often results in a declining standard of living for the beneficiary.
Accordingly, a proper balance must be struck between how much of the settlement award goes toward funding the structured settlement, and how much goes directly into the special needs trust.
Structured settlements are complex and often involve a life care planner, an independent financial planner, and a structured settlement broker, all working together.
Any remaining portion of the award that is not invested in the structured settlement is assigned to to the trustee of the special needs trust.
The purpose of the special needs trust is to preserve the needs-based government benefits that would otherwise be lost if the beneficiary received the money directly, instead of being received by the trustee.
The trustee of the special needs trust has absolute discretion over whether, how and when to use the trust’s funds to supplement the government benefits being received by the person with special needs. Otherwise, the trust funds would be considered available and countable resources for purposes of continued eligibility to receive, or to qualify for needs based government benefits.
Giving the trustee a portion of the lump sum settlement award up front –with the remainder placed into the structured settlement – allows the trustee more money on hand to meet the beneficiary’s immediate needs at the outset.
The trustee could then buy a home, purchase a van that is modified for persons with disabilities, and deal with emergency needs.
In addition, the trustee could invest some of that money into other investments that might partially offset the effects of inflation associated with fixed income payments.
In conclusion, careful consideration and planning for the immediate and future needs of the special needs beneficiary are necessary at the time before the personal injury award settlement is committed to a structured settlement.
Reaching the correct solution requires enlisting the assistance of professionals with whom the trial attorney that won the settlement award may or may not be used to dealing.
Engaging a special needs trust attorney is, therefore, advisable in order to bring in the necessary expertise.
Dennis A. Fordham, attorney (LL.M. tax studies), is a State Bar Certified Specialist in Estate Planning, Probate and Trust Law. His office is at 55 1st St., Lakeport, California. Dennis can be reached by e-mail at
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- Written by: Elizabeth Larson
California Secretary of State Debra Bowen said Tuesday that the Local Taxpayer, Public Safety and Transportation Protection Act of 2010 has qualified for this November's ballot.
The measure is meant to prevent the state from taking, diverting or borrowing local government, transportation and public transit funds by closing loopholes in state laws, according to Californians to Protect Local Taxpayers and Vital Services, the coalition supporting the initiative.
Protected funds would include the Highway User Tax on gasoline, which funds transportation-related improvements and services for local governments; locally levied taxes, such as parcel, sales, utility user or transit occupancy taxes; Public Transportation Account revenues dedicated to public transit; and create constitutional protections to prevent the state from raiding redevelopment funds or shifting redevelopment funds to other state purposes, according to the coalition.
Chris McKenzie, executive director of the League of California Cities and co-chair of Californians to Protect Local Taxpayers and Vital Services, said they will now turn their attention to educating the voters to support this initiative to protect funding for the vital local services that they rely upon.
California voters have passed measures in previous elections to restrict state raids of local government funds, as well as to dedicate gasoline taxes to transportation and public transit improvements and services, proponents of the bill have pointed out.
However, state politicians have exploited loopholes in the law and used what opponents allege are “legally questionable tactics” to borrow and raid approximately $5 billion in local government, transit and redevelopment funds in the 2009-10 budget cycle and billions more in past years.
The measure is supported by a coalition of local government, transportation, business, public safety, taxpayer, labor and public transit leaders. Not listed among the endorsers are the county of Lake and the cities of Lakeport and Clearlake.
However, County Administrative Officer Kelly Cox told Lake County News this week that he supports any measures of this kind that protect local government revenues.
“It's unfortunate that it requires ballot initiatives like this to protect local revenues, but if that's what it takes, so be it,” he said.
This particular measure, he pointed out, was driven by cities more than counties.
“Our only concern is that the state will find new ways to shift costs to counties if this measure passes, but if it does pass I would hope that it sends a strong message to state officials to stop balancing the state budget on the backs of local government,” he said.
Cox said that, at this point, cities, counties, special districts and redevelopment agencies all need protection from state raids on their revenues, and the initiative would provide another layer of needed protection.
“What a sad commentary on the dysfunctional nature of our state government that these type of initiatives are necessary,” he said.
The raids on local funds – happening at the same time as the economic downturn – are contributing to deep cuts in local services, everything from police and fire to street repair, libraries and parks, according to groups who support the measure.
“Reduced revenues are putting a strain on front-line fire protection, emergency response and public safety services,” Sheldon Gilbert, fire chief of the Alameda County Fire Department and president of the California Fire Chiefs Association, said in a written statement on the measure. “We must pass this measure to prevent future state actions that erode local public safety funding.”
Ron Cottingham, president of the Peace Officers Research Association of California, said cities and counties throughout California have been forced to make “devastating cuts to law enforcement and other public safety services,” which he said have been due in part to state budgetary raids.
Jim Earp, executive director of the California Alliance for Jobs and co-chair of Californians to Protect Local Taxpayers and Vital Services, said the measure will “once and for all protect gas taxes from future raids and insure they are used to improve our roads, highways and transit systems – just like the voters intended.”
“Local transit agencies up and down the state are cutting routes for buses, shuttles and commuter trains as a direct result of continued state raids of local transit funds,” said Josh Shaw, executive director of the California Transit Association and co-chair of the coalition.
He said the cuts are creating “real hardships” for working families who have no other mode of transportation to and from work, school, health care appointments and other life responsibilities. “The decisions made in Sacramento are harming real people who rely on local services. Enough is enough. ”
McKenzie said his group is confident the voters will pass the measure in November.
Bowen's office reported that the measure needed 694,354 valid signatures – which is equal to 8 percent of the total votes cast for governor in the November 2006 general election. Supporters submitted more than 1.1 million signatures.
This was the fifth measure Bowen has certified for the November ballot, according to her office.
For more information visit www.savelocalservices.com.
E-mail Elizabeth Larson at
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- Written by: Lake County News reports
The call will be held from 7 p.m. to 8 p.m. Pacific Standard Time.
Thompson is inviting every resident of the 1st Congressional District to join him.
Participants can ask him questions about the issues that are important to them, and the Congressman will respond live for everyone to hear.
“Our country is facing many big challenges right now, from the tough economy to the spill in the Gulf,” said Congressman Thompson. “Please take this opportunity to call in and make your voice heard. I welcome any questions, comments and concerns you may have.”
To join the call, dial 877-229-8493 and enter the passcode 13293.
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- Written by: Lake County News reports
The first of the arrests took place last Friday, according to sheriff's Capt. James Bauman.
On Friday morning at about 11:45 a.m. a property owner from the Jerusalem Grade area of Middletown reported his son and some friends had discovered an apparent marijuana grow while hiking on the property the previous evening, Bauman reported.
Deputies met the property owner and were led into a remote canyon where Bauman said they found two water tanks and a small camp with 13 marijuana plants growing in the area.
As the deputies approached the camp, two subjects emerged from the surrounding brush and were immediately detained. The two were identified as 24-year-old Robert Cole Fortin and 24-year-old Brian Adam Abbie, both of Clearlake. Further investigation led deputies to another 37 marijuana plants located near a creek, east of the camp, Bauman said.
Fortin initially told deputies he thought the two were growing the marijuana on his own property but he was unable to prove ownership of any land in the area. Bauman said both men told deputies they had recommendations for medicinal marijuana but only Fortin could produce one and the amount of plants found were determined to be in excess of the legal limit.
Deputies also found evidence of natural water diversion and other destruction of lands caused as a result of the grow, Bauman said.
Both Fortin and Abbie were arrested and booked in the Lake County Jail for felony cultivation of marijuana and misdemeanor trespass charges. Bauman said they have both since been released on bail.
On Saturday, Bauman said deputies served a search warrant for a suspected illegal grow on an undeveloped property in the area Highway 29 and Diener Road in Lower Lake.
Bauman said deputies had actually discovered the 130-plant grow on June 16 when a property owner in that area had reported a suspicious vehicle and possible grow on or near his property. A search warrant was secured in the days that followed, in order for deputies to return and further investigate.
When deputies reentered the grow on Saturday, they located 57-year-old Richard Clayton Stine in one of two travel trailers at a camp site within the grow, Bauman said. Stine told deputies he had been hired off of the street by two Santa Rosa men to tend to the grow and that one of the men owned the property.
Stine possessed a recommendation for medical marijuana, and one was located for the property owner, but both cards were expired and the number of plants in the grow exceeded the legal limit, according to Bauman's report.
Deputies located a total of six gardens on the property and around the camp. A total of 130 marijuana plants were eradicated and several loaded firearms were seized. Bauman said one of the travel trailers and another utility trailer in the camp were reportedly stolen out of Santa Rosa and were also recovered.
Stine was arrested and booked on felony charges of cultivation, sales and possession of marijuana for sale. He also is charged with being a felon in possession of firearms and possession of stolen property. Bauman said Stine has since been bailed out of jail.
On Tuesday, members of the Sheriff’s Department, the California Department of Justice (DOJ), and the Bureau of Land Management (BLM), conducted Campaign Against Marijuana Planing (CAMP) eradication operations on multiple illegal grows in a remote area about 8 miles southeast of Lower Lake. Bauman said a contract helicopter was used to insert and extract eradication teams during the operation with a Short Term Airborne Operation (STABO) line.
At about 4 pm, a team of two officers were being lowered by helicopter into one of the gardens when the pilot spotted a subject armed with a rifle jump out of concealment and flee from the garden. Bauman said the pilot inserted the team and while maintaining sight of the fleeing suspect, quickly pulled other teams from nearby grows and placed them in the area to assist with the suspect's apprehension.
After about 20 minutes of tracking the suspect through rugged terrain, deputies confronted him at gunpoint in a creek bed. After several warnings to stop, he dropped his weapon, placed his hands in the air, but then fled again, Bauman reported.
A deputy chased the suspect back up a hill from the creek bed and was able to catch and arrest him after a brief struggle. Bauman said a loaded magazine for the semi-automatic rifle he was carrying was found in one of his pockets, along with other ammunition and some irrigation pieces consistent with maintaining a garden.
Francisco Ornelas Diaz, 22, a reported transient out of Lower Lake, was extracted from the grow by helicopter to a landing zone where he was then transported to the Lake County Jail. Bauman said Diaz was booked on felony charges of cultivating marijuana, possession of marijuana for sale and committing a felony while armed. He is held without bail due to an immigration hold.
A small camp was located in the garden Diaz had fled from and by the end of the day, 887 marijuana plants had been eradicated from that garden alone. Bauman said several other adjacent gardens marked for eradication that day had to be postponed due to Diaz’s arrest.
Bauman said this is the first week of seasonal eradication operations coordinated by the Lake County Sheriff's Office with CAMP and other allied agencies in Lake County.
The number of plants eradicated this week alone is already at 38,000, including 18,000 plants contained in seed beds found on public land in the Boggs Forest area. Bauman said it is anticipated at least 100,000 plants will be eradicated by the end of the week.
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