1962 IBAR Partnership was formed by Raymond G. Schultz PhD and
Robert E. Schultz PhD. Under
this partnership, forensic economic testimony and valuation
services were provided to legal community for litigation matters
involving economic disputes.
In 1969 IBAR Incorporated was formed and continued to
perform the same services provided by the earlier partnership.
1977, IBAR Inc. became involved in the emerging structured
settlement industry. Prior
to IBAR Inc.’s entry into this area, all structured
settlements utilized in the settlement of personal litigation
required that the defendant purchase and own an annuity contract
which would then pay the future periodic payments to the
plaintiff. One very
significant drawback for the defendant under this arrangement
was that the defendant remained the owner of the annuity policy
and therefore responsible to the plaintiff for the future
payments. In other
words the claim file remained open until the death of the
plaintiff or until the end of the annuity period.
The defendant’s ability to assign its liability for the
future periodic payments and thereby terminate any continuing
liability was hampered by the absence of internal Revenue
Service ruling or regulations which addressed the assignee’s
potential tax liability.
Inc. was instrumental in resolving this predicament in 1980.
At that time IBAR Inc. applied to the Internal Revenue
Service for a private letter ruling to determine the tax
treatment of a third party assignee responsible for making
future periodic payments to the plaintiff.
IBAR Inc. pursued the ruling on behalf of the United
States Justice Department which was attempting to settle a
sensitive claim involving several foreign nationals.
The final ruling provided for favorable tax treatment for
the third party assignee. For
the first time a defendant found itself able to assign its full
and complete liability to a third party.
on this and other rulings, IBAR Inc. began a successful campaign
to introduce Federal legislation designed to codify federal and
state regulations with regard to structured settlement payments.
Ultimately H.R. 5470, which was known to many of the
legislators as the “IBAR Bill”, was passed by Congress and
signed into law in January 1983.
With its passage, H.R. 5470 became Section 130 of the
Internal Revenue Code. Many
life insurance companies responded to the passage of this
powerful piece of legislation by creating entities within their
own corporate structures capable of accepting an assignment of
liability from the defendant.
the acquisition of IBAR Inc. by Merrill Lynch in 1982, a new and
separate corporation, IBAR Settlement Company, was formed in
Settlement Company performs services provided by the earlier
organization and has expanded its settlement services as a
result of certain changes to the Internal revenue Service Code
as well as recently passed Federal tax legislation.
All of the services provided by IBAR Settlement Company,
included the more recently created Special Needs Trust, are
described in greater detail in the “Special
Needs Trust” portion of this web site.