Owning a structured settlement annuity gives you a lot of benefits. Structured settlement payments are advantageous in providing financial security on a long term basis for you and your family and the payments as well as interest earned are free from taxes. It is legal to use this money either for any impending emergencies or for an investment with high yielding returns.
The federal law HR 2884 permits you to sell your structured settlement payments without paying any taxes. In addition to federal laws, more than two-thirds of states in the United States allow the sell of structured settlement payments. In both cases, however, the transaction must be approved in court in order to stay tax free.
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 presiding judge will go through your case and give his judgment based on whether this sale will be in you and your family’s interest or not.
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. You ensure that you attend the hearing in the court on that day which may help your cause much. Court approval is not mandatory for selling your structured settlement payments; however the amount and interest will be taxed.
In all probability, the purchasing company with whom you have been discussing might be willing to purchase your structured settlement payments. They will simply do some extra legal work to get the sale finalized. They might not charge you for this extra effort; you must realize that you may have to pay taxes on the money received in the absence of court approval.
It is necessary for you to get quotations from interested parties. 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. The purchasing company will send you a disclosure document to sign. This document basically gives the conditions of this transaction. It must be singed and returned.
The next step in this is beginning of the process for court approval. Depending on your state of residence and your insurance company, the process can take up to 90 days. After receipt of court approval it takes 10 days to receive your money.