N001839
Tuesday, January 15, 2002 9:33 PM
Interin Final Rule
Just some comments ...
Life Insurance: Yes, it should be deducted as a "other source compensation". However, it probably wouldn't hurt to reduce the life insurance compensation by any premiums directly paid by the deceased.
Overriding wishes of the deceased: As far as the Special Master not agreeing with how the personal representative intends to distribute the compensation, I don't think you should get involved. As long as the PR is acting according to the will, if any, and the laws of the state in question, the Special Master should not be make this type of value judgment against the express wishes of the deceased. The 'true' victim is the deceased. The 'survivors-of-a-victim' are only secondary. Any overriding of the wishes of the deceased should only be done in a case of unquestionable NEED (poverty-level type 'need', not Wall Street hot shot type 'want'), not just GREED. State laws (at least my state) have built in provisions for elective-share for a spouse who is really getting screwed, so let that be invoked. You should follow the determination of the state if at all possible. There may be very good underlying reasons for provisions of the will which the PR nor you have any notion of.
Economic Compensation: I really don't understand why these 'survivors-of-victims' will receive, in effect, a life time of handouts when our federal law has explicitly stated that welfare has a 5-year lifetime eligibility limit. Why isn't there a 5-year limit on this 'welfare' program too?
401ks/IRAs/etc: The 'other source compensation' value of these sources needs to be evaluated intelligently, taking into account economic conditions and the eventual recipient of such benefits. For example, a spouse may be entitled to wait up to 5 years before having to take over a 401k, but if it goes to a non-spouse there may be a 60-90 day time frame. This can GREATLY impact the ultimate value of what is received. Make sure a Sept. 21, 2001 document is presented as the supposed 'current' value! Also, given the variations in when investments may have to be 'cashed in', you should probably consider the types of investments, their current value, their expected future value (relative to 'cash in' time frames). It is a tricky situation, but even I am able to figure out how best to play this one - get the government to reimburse any losses realized over the last couple years while protecting my ability to make up that loss again by holding off for a while. This fund shouldn't be providing 'free capital' for 'speculators'.
Question for the Future: Insurance companies 'rose to the occasion' this time around and agreed not to invoke war/terrorism clauses as far as making good on individual coverage for property and medical. However, as they have stated, there is no guarantee that they will do it next time. Given that the initial victim estimates were grossly overstated (at least double of reality), as opposed to 'upping' the amount available to the smaller number of claimants (as potential recipients have suggested you do), I suggest you set aside the 'unneeded' funds for future use in 'making good' on individual insurance claims related to future terrorist actions that may be denied next time around.
Individual Comment
Denver, CO