Selling Structured Settlements May Be Risky – Exercise Caution

Companies that purchase structured settlements and annuities profit by giving sellers huge lump sums that are actually smaller than the discounted face value of the payments.

Because of the abuse of some structured settlement buyers, a tax treatment favorable to structured settlement sellers has been adopted

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Courts Want to Be Sure That Your Selling Is a Good Move

The transfer of a seller’s structured settlement payment rights requires the annuity brokerage or factoring company to file petitions in the county where the seller lives. To approve the transfer of payment rights, the court must determine if:

1.    the transfer is in the best interest of the structured settlement seller, taking into account the welfare and support of the seller’s dependents;

2.    the seller has been advised in writing to seek legal and financial professional consultation and either has received counsel or decided to waive it;

3.    the seller has received the disclosure forms;

4.    the transfer of payment rights will not interfere with court orders;

5.    the seller understands the terms of the transfer agreement and disclosure form; and

6.    the seller is aware of his/her right to cancel the transfer but still wants to proceed.