Structured Settlements: Selling your payments
Written by Post on January 15th, 2010 in Finance.
Owning a structured settlement annuity gives you a lot of benefits. Structured settlement payments are advantageous in providing financial security on a long term basis for you and your family and the payments as well as interest earned are free from taxes. Also there is no legal hurdle in using this money either for your emergency situations or for high yielding investments.
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. In both cases, however, the transaction must be approved in court in order to stay tax free.
Selling Your Structured Settlement
It is not difficult to get approval of the court for selling part or full quantum of your structured settlement payments provided you are able to prove your genuine requirement for 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.
Any adult with a sound mind can get court approval for selling his structured settlement payments as long as he can prove that he and his family will get benefitted by this transaction. You ensure that you attend the hearing in the court on that day which may help your cause much. Sale of structured settlement payments is permissible without court approval but you will be taxed on the payments and also its interest.
In all probability, the purchasing company with whom you have been discussing might be willing to purchase your structured settlement payments. However, they may have to do additional legal work in order to ensure that the sale is completed. You are not charged for this extra effort; however, without court approval, you may be liable to pay taxes on the money you receive.
First, you must get quotes. 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. You will receive from the purchasing company a disclosure document which you are expected to sign. You will find in this document the details of the conditions of the transaction. You must sign and return after you go through the document thoroughly.
The next step is to get the court order. The duration for court approval depends on your state of residence and also the state of residence of your insurance company and this will normally be about 90 days. Under normal circumstances you will receive your money within 10 days after court approval.
