Structured Settlement Transfer
A structured settlement transfer will probably not be as quick and easy as some advertisements make them out to be. And, there is one simple explanation for that. Although a person may be entitled to the money, he or she can't just sell the settlement to a third-person buyer without court approval. Generally, these types of financial agreements are the result of a lawsuit. Therefore, they should be considered legal agreements that are controlled by the court. Although the money may legally belong to the plaintiff who won a lawsuit, the agreement will involve at least one other person or an insurance company. The other party's rights must be taken into consideration. Therefore, a judge must approve any structured settlement transfer. Also, most states have some sort of structured settlement protection legislation. And, the laws do just what the name implies. Without the act, unscrupulous third-party buyers would be buying settlements and getting rich. Unfortunately, the buyers would be nothing more than predators operating without any sort of control. Their profits would be gained by taking advantage of other people's financial hardships. Even with the legislation, people struggling to make ends meet can be lured in and duped out of their money by a sharp tongue. "Do they not err that devise evil? But mercy and truth shall be to them that devise good. In all labour there is profit: but the talk of lips tendeth only to penury. The crown of the wise is their riches: but the foolishness of fools is folly." (Proverbs 14: 22-24)
Basically, five things must happen to satisfy the terms of the protection act before a structured settlement transfer can be approved. First, all sales terms must be clearly written out in the contract. Get everything in writing because verbal agreements are useless. They won't hold up in court. Second, a person must be provided a grace period in which they are permitted to change their mind and back out of the transfer. Third, a person must be advised in writing that they should seek professional financial advice before entering in to an agreement. Some states allow this part to be waived. Check state law for specifics. Fourth, a judge must hear the case. Finally, a judge must issue a court order approving the sale to a third-party buyer. For the protection of the individual, most states make it difficult, not impossible, to complete a structured settlement transfer. Some agreements contain anti-sale or anti-transfer language. But, this doesn't necessarily preclude the agreement from being sold. Even with anti-sale clauses written into the contract, a judge can determine that the transfer is in the best interest of the individual and approve the sale.
If approved by a judge, a person will usually be allowed to sell all or part of their payments, which are a financial agreement that a plaintiff accepts as a resolution to a personal injury claim. Generally speaking, the agreement will include a schedule for when payments will be made. Some online research indicates that once the transferred payments are paid to the third-party buyer, all remaining payments retained by the original owner will resume. Structured settlements are a relatively recent development in the legal world. An online search indicates that they date back to about the early 1980's. Several countries in addition to the United States permit payments as an alternative to lump sum payments. A structured settlement transfer does have many advantages. Obviously, having a large sum of money all at once will open a number of financial doors. The money can be used for such things as paying off bills, paying college tuition, or even taking a dream vacation. Once a person has received the cash from the sale, he or she can basically do with it as they please. Perhaps a small celebration of sorts may also be in order because getting the money through a structured settlement transfer is not going to be quick and inexpensive.
Third-party buyers involved in the structured settlement transfer are out to make a profit. So, despite what a catchy television, radio, or online advertisement might say or suggest the buyer is not really concerned with the welfare and best interests of the person selling the structured settlement. Obviously, the financial institution will want to get the settlement for as little money as possible. Therefore, the agreement will be purchased at what is known in economics as present value. Because the world of finance and economics are in a constant state of fluctuation present value will most likely be far less than the total amount of all future payments. Also, application fees, legal fees, and closing fees will increase the cost of the sale. Since the transaction is a legal issue, don't expect it to get processed quickly.
Some online legal sites estimate that a structured settlement transfer could take as long as 60 to 90 days to complete. Also, taxes are not paid against the settlement payments. However, some websites offering information on settlement transfers suggest that money received from the sale may be taxable. Check with a tax, legal, or financial expert for specifics about taxes. Once the initial paperwork is completed, a judge will thoroughly examine all aspects of the case. As part of the review, the judge may also inquire about the intended use of the funds. If the judge determines that the transfer is in the best interest of the seller, he or she will issue a court order approving the sale. Keep in mind, once the judge approves the transfer, an agreement is signed with a third-party buyer, the grace period has ended, and a lump-sum payment has been received, the rights to the settlement may be gone for good.
Transfer Of A Structured SettlementThere are agencies that will extend a buy out of a structured settlement to benefactors, giving the beneficiaries of the settlement the option of having a large amount of cash on hand. Over the course of time, many who have agreed to receive compensation for injuries or damages in a package of installment payments, have been faced with circumstances that would benefit from having more money on hand. There are many reasons that those receiving financial restitution may want to change the structure of their current payment plans, or simply cash out. With the help of professional agencies that purchase annuities, this option can be realized.
Taking a look at the reasons one would need a transfer of a structured settlement procedures will give those considering, a better perspective before making the choice. When a person or family receives financial compensation for an injury, wrongful death, or extensive damages to persons or things, this compensation is called a settlement. Generally, the compensation package is offered in increments, or payments, and for most, this is a good option, giving a family a steady stream of income over a course of time. There are families that simply could not manage large amounts of cash, and having the security of a consistent income by payment is a really good option. But, for others, a one-lump sum cash payout could prove to be the better choice. Perhaps, living conditions need to improve and house could be bought. Or, a savvy investor may do well by investing monies. Whatever the reason, there is the option of getting a transfer if the original court agreement was for a financial installment plan. A buy out of a structured settlement could have interesting financial options.
Once a price or sum has been awarded by the courts to a recipient, the company or person causing the damage or injury is responsible to pay their insurance coverage provider. Actually, the insurance agency is the medium that will be making the structured payments to the beneficiary. The insurance company then sets up an annuity for the recipient. As the beneficiary of the annuity, most persons receiving installment payments can assign another party the entitled payments, such as with a company that offers a buyout of a structured settlement. There are some court agreements that do not allow the beneficiary to assign a third party as recipient. Recipients should always, first, speak with attorneys and make sure of the conditions and terms of their restitution agreements.
With annuities held by insurance agencies, the agency is actually making interest on the sum of money paid by the offending company or person to the beneficiary. There are some benefactors that would prefer to invest the money themselves, taking the opportunity to increase their compensation. Situations change and many are looking into the transfer of a structured settlement to an agency that will purchase the annuity from the insurance company and offer cash to the benefactor. There are agencies that specialize in these transactions.
However, a buyout of a structured settlement is not necessarily an easy transaction to manage. First, any change in court ordered procedures and documentation must be approved by the court. Those wanting a transfer of a structured settlement will need to file a petition with the court, and then present a case to a judge. Support for such petition will be determined by the judge's interpretation of the best interest for all parties involved, including any dependents of benefactors. This entire procedure may take up to ninety days, so a buy out of a structured settlement can rarely address immediate and emergency financial issues.
When dealing with sensitive financial matters, it is good to seek the counsel of an attorney and also the counsel of reputable financial advisors. The Bible teaches that the wise man or woman will listen carefully to the voice of experience and wisdom. "He that diligently seeketh good procureth favour: but he that seeketh mischief, it shall come unto him. He that trusteth in his riches shall fall: but the righteous shall flourish as a branch." (Proverbs 11:27-28) When good and sound advice is sought, those that listen and take counsel will generally make the wisest choices.
Taking time to thoroughly investigate a buy out of a structured settlement is also making a wise choice. All aspects of a buy out should be carefully weighed. How much is the buy out costing? What real advantages are there to having cash in hand? Historically, has there been good, solid financial decisions made within the family? Make a list of pros and cons concerning a transfer of a structured settlement arrangements. And, don't forget to pray for God's direction.
Getting online and conducting a search of related topics to a transfer of a structured settlement will help those considering a this action get more information for making decisions. There are several companies that purchase annuities and settlements which advertise online. Researching these companies by speaking with them and asking questions should be helpful. Also, be sure and secure a good attorney who can advise in legal matters.