There are a lot of benefits to owning a structured settlement annuity. Structured settlement payments provide long term financial security for you and your dependents, and the payments and earned interest are tax free. Also there is no legal hurdle in using this money either for your emergency situations or for high yielding investments.
The federal law HR 2884 protects individuals who want to sell their structured settlement payments to meet unplanned financial needs; this can be done without any tax implications. Two-thirds of states in the United States also permit the sale of structured settlement payments in addition to federal laws. The most important thing in this is that in both the cases the sale has to approved by a court.
Selling Your Structured Settlement
In case you are in a position to convince the judge about your actual requirement of funds for your use it is not all that difficult to sell all or part of your structured settlement payments. Your proof will be examined by the judge to find out whether this transaction is in the interest of you and your family.
In order to get a positive judgment from the court for selling your structured settlement payments you must be an adult with sound mind and you should have genuine reasons to prove that you are doing this in the interest of your and your family’s welfare. If you appear in the court on the hearing day your chances of getting court approval will be high. Court approval is not mandatory for selling your structured settlement payments; however the amount and interest will be taxed.
In most of these cases, the purchasing company you are associated with will be interested in buying your structured settlement payments. They may also be willing to handle the legal issues to facilitate finalization of this sale. They might not charge you for this extra effort; you must realize that you may have to pay taxes on the money received in the absence of court approval.
First, you must get quotes. Getting quotations from a number of companies is advantageous to you because it will give you a chance to select the best among them. You should send copies of the structured settlement policy to the purchasing company whom you select after running through various applications. In return, the purchasing company will send you a disclosure document for your signature. You will find in this document the details of the conditions of the transaction. You must scrutinize the document thoroughly, sign it and return to the purchasing company.
Next, the court order process will begin. This process takes up to 90 days depending on your state of residence as well as your insurance company. In most cases, once you are approved, you will receive your money within 10 days.