Sell My Annuity
Considerations
Prior to selling your structured settlement annuity, you should consider
why you got it in the first place. The advantage of a structured
settlement over a cash settlement should be reconsidered. If you recall,
the tax-free damage payment for a personal injury, workers' compensation
claim, etc. is extended not just to the money paid by the released party,
but to all the interest earned on that money while it is the possession of
the structured settlement company or other party that is responsible for
making the payments. For example, if the funding asset cost $1 million and
the lifetime payout on that asset is $2 million, the whole $2 million is
tax-free income. If you were to take the $1 million as a cash lump sum
instead, then any interest earned on it would be subject to taxes.
Additionally, selling of structured settlement annuities must be
accomplished according to strict legal guidelines. A Transfer and
Assignment Agreement is executed with the seller (you) following full
disclosure of the price and other contractual terms. The sale is then
announced to any and all interested parties (insurance companies and
payment to beneficiaries) and then must be approved by a judge.
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