Online Calculator | Selling your Structured Settlement Annuity

Selling your Structured Settlement Annuity

The advantages one can get from having a structured settlement annuity are quite a few. 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.

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. 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 both cases, however, the transaction must be approved in court in order to stay tax free.

Selling Your Structured Settlement

The structured settlement payments can be sold either in full or in part and in case you require a tax free status for this you have to get court approval; this can easily be got if you have genuine requirements for funds. 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.

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. 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.

It has been found in practice that in a large number of cases the purchasing company working with the seller purchases the structured settlement payments. They will simply do some extra legal work to get the sale finalized. 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.

In order to select the right purchasing company, you should call for quotations from various purchasing companies. You will always get benefitted if you have multiple quotations. In case you find a suitable purchasing company out of the various quotes received, you should send to the purchasing company copies of the structured settlement policy. A disclosure document will be sent by the purchasing company asking you to sign. In this document the conditions of transaction would have been clearly specified. It must be singed and returned.

The court hearing will be the next step in this process. Depending on your state of residence and your insurance company, the process can take up to 90 days. Once court gives approval it might take 10 days to get your money.

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