Structured Settlements: Selling your payments
The benefits that you can get by owning a structured settlement annuity are invaluable. Structured settlement payments provide long term financial security for you and your dependents, and the payments and earned interest are tax free. However, if you need the money or simply have better investment options, you are entitled to it.
Your structured settlement payments can be sold without attracting any federal taxes and this has been approved as per federal law HR 2884. About 67% of the states in the United States of America also allow the sale of structured settlement payment in addition to the federal laws. In order to become eligible for selling this without paying any taxes you should get the prior approval of the court.
Selling Your Structured Settlement
It is fairly easy to be approved in court for the sell of all or part of your structured settlement payments, as long as you can prove that there is a need for the money. The approval or otherwise will be given by the judge after reviewing your case to decide whether you require this money for a transaction that will benefit you and your dependents.
Under normal circumstances, the judge might not reject your case if you can prove that you and your dependents stand to benefit from this transaction; this also requires that you should be an adult with sound mind. Keep in mind that appearing at the hearing may help your cause. You can sell your structured settlement payments even if the court does not approve of it; however, this will deprive you of the tax free status for this payment and its interest.
In all probability, the purchasing company with whom you have been discussing might be willing to purchase your structured settlement payments. They will simply do some extra legal work to get the sale finalized. They will not charge you for this extra effort they have taken for this; however, in the absence of court approval, you are liable to pay taxes on the money you receive.
In order to select the right purchasing company, you should call for quotations from various purchasing companies. Getting quotations from a number of companies will be in your interest because you could select the best one for you. If you like a quote that is given, you will send in copies of the structured settlement policy to the purchasing company. In return, the purchasing company will send you a disclosure document for your signature. This document contains the clauses and conditions of the transaction. It must be singed and returned.
The next step in this is beginning of the process for court approval. This process takes up to 90 days depending on your state of residence as well as your insurance company. Under normal circumstances you will receive your money within 10 days after court approval.