Sell Structured Settlement
Why a Structured Settlement in the First Place?
Despite all the best intentions, lump sum payments tend to be dissipated
within a short period of time after the money is received by the claimant.
It is believed that 90% of cash settlements are usually gone within five
years of their receipt. Tragically, when the money is intended to replace
lost income for a disability or to care for the seriously injured over
their lifetime, that person may be left without the means of self-support
nor be able to receive appropriate care.
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Deciding to Sell a Structured Settlement
Okay, but things happen and now you need the money. One of the first
things that you may ask when deciding to sell a structured settlement is:
"What will be the tax consequence?" Firstly, you should know that the
Federal Tax code [IRC§ 104(a)2)] was amended in 1996 (Small Business Job
Protection Act), whereby congress preserved the right of family members to
make derivative claims based on the physical injury or illness of another
person, even though the claimant personally may not have suffered the
injury or illness. Basically this means that all sums received (except for
punitive damages) are excluded from a claimant's gross income. Simply put,
as of January 23, 2002 a new law that governs such sales, does not impose
any tax liability for selling a structured settlement.>>
Sell Future Payments
Disadvantages of Structured Settlements
The inflexibility of a structured settlement can be a major disadvantage.
If a situation arises where you need to access a large amount of cash, you
can't turn to your structured annuity for it, unless you are willing to
sell all or part of it. A structured settlement can be advantageous as it
does not allow the funds to dissipate. However, being able to access your
money when you want, can weigh heavily in such a case.
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Selling Future Annuity Payments
Many individuals want to sell future payments from their annuities in
order to cover expenses such as college tuition, opening a business or
paying off bills. There are also others who understand the time value of
money and will want to take advantage of a lucrative investment
opportunity. Whatever the reason, more and more people are choosing to
sell future annuity payments rather than wait for future dollars to be
eaten away by inflation. You should be aware however that it will take at
least 90 days to complete the process of selling future payments from your
annuity. Beware of anyone that claims it will take less time!
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Sell Insurance Payment
Selling Annuity Insurance Payments
Many times when people are in involved in personal injury or wrongful
death cases, settlements with insurance companies are reached whereby they
elect to receive a series of payments over a long period of time rather
than an immediate lump sum. These payments normally total more than the
amount a person would have received for a lump sum settlement. In order to
make this election, the Plaintiff must sign a Settlement and Release
Agreement that allows the Defendant to purchase an annuity policy to
provide for the payments to the Annuitant.
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More Info
You should be aware that selling insurance payments are restricted by
certain legal guidelines. These guidelines must be followed in order to
complete the transaction. A Transfer and Assignment Agreement will need to
be executed with the seller following full disclosure of the price and
other contractual terms. An experienced broker will help ensure these
guidelines are met. Additionally, the sale is announced to all interested
parties and then is submitted to the court for approval.>>
Sell My Annuity
I Want to Sell my Annuity
Okay, you say "sell my annuity" today, but you should be aware that the
process takes approximately 90 days before you will actually receive any
cash. On January 22, 2002, President, George W. Bush signed into law a
bill that protects people when selling their structured annuity payments
in order to meet unplanned future needs. This new law makes all structured
settlement payment sales subject to a court order. If a court order is not
obtained prior to the sale, a tax that is equal to 40% will be imposed on
the total amount of payments sold. This new law helps you when you ask a
broker to: "sell my annuity."
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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.
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Selling Annuity
The Selling Annuity Process
There are a number of different programs whereby an individual can access
any portion of their annuity. The selling annuity of a structured
settlement process firstly requires that a court order be obtained which
authorizes the sale. This is required by all states and by Federal
Statute. The advantage of needing a court order prior to selling the
annuity helps to protect you. The court helps to determine that you are
receiving a fair amount when selling the annuity and that any remaining
payments that aren't sold are protected.>>
Dealing With the Buyer/Broker
Most brokers are honest and will try to get you the best price for your
money. However, most have very little or no experience in the area of
selling structured settlement annuities. The practice of selling annuities
can be very complicated and those graduates of "one-week" courses that
makes them "certified," lack the experience needed to handle the deal.
Realistically, a broker that handles such deals should have a minimum of
two years in the business in order to handle the deal effectively.
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