People who own a structured settlement annuity benefit a lot from it. Structured settlement payments provide long term financial security for you and your dependents, and the payments and earned interest are tax free. In case you need the money for any emergent situations or you find that you can invest this money in a better way you are entitled to do it as per law.
You can sell your structured settlement payments legally in US as per the federal law HR 2884, and this sale can be made without your paying any tax. ) About two-thirds of the states in the United States also permit sale of structured settlement payments. However, you must keep in mind that the tax free status is possible only if the court approves such a transaction.
Selling Your Structured Settlement
Getting approval for the sale of your structured settlement payments from the court is relatively easy if you have solid reasons to prove that you require this money. The presiding judge will go through your case and give his judgment based on whether this sale will be in you and your family’s interest or not.
The judge might not refuse court approval for selling your structured settlement payments if you are an adult with a sound mind and also if you can prove that this sale is beneficial to you and your family. 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 most cases, the purchasing company you are working with will still buy your structured settlement payments. However, they may have to do additional legal work in order to ensure that the sale is completed. They refrain from charging any fees for this effort they have taken; however, you are liable to pay tax on the money received without court approval.
Quotations have to be obtained from various purchasing companies for purchasing the settlement. Getting quotations from a number of companies will be in your interest because you could select the best one for you. You must choose the company with whom you want to proceed further and after selecting this company you should send the copies of the structured settlement policy to the purchasing company. In return, the purchasing company will send you a disclosure document for your signature. In this document the conditions of transaction would have been clearly specified. You must scrutinize the document thoroughly, sign it and return to the purchasing company.
The next step is to get the court order. This process takes up to 90 days depending on your state of residence as well as your insurance company. Once court gives approval it might take 10 days to get your money.