SSPA Reforms in Georgia & Elsewhere

June 24, 2021

Not as great as you think...

The Georgia SSPA changes, mirroring recent changes to Louisiana, are generally a step in the right direction when taken at face value. There are elements of oligopoly promotion, exclusion of fair competition, and the like, but that’s not for today. Instead, we need to address an unseen and more insidious element of standardization in SSPA’s without regard for the practical realities of each state: uniform requirements for hearings where the payee is domiciled.

Well, that’s a non-starter, isn’t it? Who doesn’t agree with such a basic measure? It’s meant to keep all that evil forum shopping at bay! For those of us in more urban areas with properly staffed and regularly scheduled courts, it’s inconceivable that this could be a bad thing. For much of Georgia and other more rural states, though, it is, for the simple fact that they do not have properly staffed or regularly scheduled court. In fact, in many rural areas of Georgia, specifically, they only have court availability a few times a year. This may seem fine for more routine cases that courts hear, but its grossly unfair for those with financial emergencies that require the factoring vehicle to solve. The entire basis of IRC 5891, the factoring statute, revolves around recognizing and addressing time sensitive financial needs faced by annuitants with no recourse but to cash out part or all of their structures. It’s simply unrealistic to expect that people in these situations will be able to last 4-8 months on a tiny rural docket where they’re domiciled. In other words, we must face an ugly, uncomfortable truth:

Sometimes to properly serve the annuitant’s financial needs we need to move their hearing into a court that will actually hear it within a reasonable time frame. “Forum shoppers!” you cry. Fair enough. But in this case, it’s a matter of actually helping the annuitant in need, or letting them face financial ruin because the means available wasn’t ideal.

Like most laws, the Georgia SSPA isn’t perfect, but we’re not demanding a total rewrite here or anywhere else. A simple amendment could be added to address this in any state where the issue is present, one that accounts for the time sensitive nature of the issues annuitants face and, in the event that a court can’t set a hearing within a reasonable time when in a rural county, the annuitant be permitted to move the hearing to a nearby jurisdiction that can address it in a more timely manner. Simple, clean, understanding, or, in a word: reasonable. That’s the entire basis of factoring as an option.

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