Selling your Structured Settlement Annuity

People who own a structured settlement annuity benefit a lot from it. First of all, you and your family/ dependents are made financially secure for a considerable amount of time because of having structured settlement payments and these payments including the interest earned on them are tax free. This money can be used for your urgent needs or for any other investment where you expect a better ROI.

The federal law HR 2884 permits you to sell your structured settlement payments without paying any taxes. The sale of structured settlement payments is allowed not only in federal laws but also in the state laws of the two-thirds of the states in the United States.  However, in order to get the tax free benefit it is necessary that this transaction is approved by court.

Selling Your Structured Settlement

It is fairly easy to be approved in court for the sell of all or part of your structured settlement payments, as long as you can prove that there is a need for the money. 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. In order to improve the chances of your getting court approval it is advisable for you to attend the court in person on the day of hearing. If you are not approved in court, you can still sell your structured settlement payments.

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. However, they may have to do additional legal work in order to ensure that the sale is completed. They will not charge you for this extra effort they have taken for this; however, in the absence of court approval, you are liable to pay taxes on the money you receive.

Quotations have to be obtained from various purchasing companies for purchasing the settlement. It is always beneficial for you to get multiple quotes. You must choose the company with whom you want to proceed further and after selecting this company you should send the copies of the structured settlement policy to the purchasing company. In return, the purchasing company will send you a disclosure document for your signature. In this document the conditions of transaction would have been clearly specified. It must be singed and returned.

Next, the court order process will begin. Under normal circumstances this takes up to 90 days and this depends on your state of residence and your insurance company. In majority of the cases the sellers get their money within 10 days after court approval.