To sell future payments requires court authorization.The process required to purchase structured settlements involves analyzing client contracts, presenting offers, contacting lawyers, obtaining court approval, and providing lump sum payment in exchange for future payments.
There are several reasons Annuitants need to sell future annuity payments. Prior to seeking out investment companies to purchase structured settlements, Annuitants need to first determine if the sale is allowed in their state of residence. More than 30 states prohibit the sale or transfer of future annuity payments.
Another consideration is tax consequences of obtaining lump sum cash in exchange for future payments. Funds provided in exchange for future payments may also be subjected to taxation at both levels.
Companies that buy structured settlements do not provide full face value. If the state of residence allows the sale of future payments, Annuitants must appear in court to present their case as to how the sale will improve their life. Judges will not allow Annuitants to obtain upfront cash for frivolous purposes.
In states that permit the sale of structured settlements, Annuitants can elect to sell future payments in whole or part. Courts normally do not allow Annuitants to sell litigation settlements in whole, but may authorize if payments are structured for lottery winnings.
Annuitants must obtain transfer of payment rights from the insurance company that guarantees payments. Insurance companies are not required to permit the sale of payments or agree to payment rights transfers.
A trusted source for locating reputable buyers is National Structured Settlements Trade Association at NSSTA.com.
Obtaining legal counsel is the only way to ensure structured settlement sales are properly conducted and adhere to state laws. Lawyers can advise of tax ramifications, assist with negotiations, and help Annuitants ensure they receive fair offers from companies that purchase structured settlements.
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