The benefits that you can get by owning a structured settlement annuity are invaluable. 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. Two-thirds of states in the United States also permit the sale of structured settlement payments in addition to federal laws. In order to become eligible for selling this without paying any taxes you should get the prior approval of the court.
Selling Your Structured Settlement
Getting approval for the sale of your structured settlement payments from the court is relatively easy if you have solid reasons to prove that you require this money. The judge will review your case to see if the transaction will benefit you and your dependents.
As long as you are an adult of sound mind, and you can proved that you and your dependents will benefit from the transaction, the judge has very little reason to deny your case. 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. Even if you don’t get court approval for selling the structures settlement payments you can still sell this, however you will not get the tax free status for this.
In most of these cases, the purchasing company you are associated with will be interested in buying your structured settlement payments. They take the responsibility of doing the necessary legal work to ensure that the sale finalized. 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 should send copies of the structured settlement policy to the purchasing company whom you select after running through various applications. In return, the purchasing company will be sending a disclosure document that should be signed by you. This document basically gives the conditions of this transaction. You must scrutinize the document thoroughly, sign it and return to the purchasing company.
The next step in this is beginning of the process for court approval. The duration for court approval depends on your state of residence and also the state of residence of your insurance company and this will normally be about 90 days. In most cases, once you are approved, you will receive your money within 10 days.
