Purchase Structured Settlements
Investors who purchase structured settlements must adhere to state and federal regulations. Numerous legal restrictions affect who can buy structured settlements. When selling annuities it is crucial to work with a qualified investor or annuity broker.
Purchasing structured settlements in the U.S. is prohibited in nearly two-thirds of the states. Structured settlements are commonly used as injury settlements. The purpose of annuity payments is to provide consistent cash flow to individuals requiring long-term medical care or replace lost income. Annuity selling restrictions ensure plaintiffs' have sufficient funds to pay for long-term living and healthcare expenses.
States which allow annuity payment buyouts require court authorization. Annuitants must provide written documentation outlining terms of the settlement agreement, along with compelling evidence the sale will improve their quality of life. Annuitants are strongly advised to seek legal counsel before selling insurance settlements.
When investors purchase structured settlement annuities they provide lump sum cash in exchange for the right to receive future payments. Annuities can be sold in whole or part. Investors do not pay face value for structured settlement payments. Instead they offer a discounted price for providing upfront cash.
It is best to shop around for investors who purchase annuity settlements. The National Structured Settlements Trade Association provides nationwide listings of reputable buyers of structured settlements via their website at nssta.com.
Investors who purchase structured settlements should be able to answer all questions regarding the advantages and disadvantages of cashing out structured annuities. Ask for references and follow-up with each to determine their experience with the annuity buyer.
Always consult a lawyer prior to signing cash payout contracts. Attorneys can determine if the purchase offer is reasonable and ensure your rights are protected. Both buyers and sellers of cash structured settlements should engage in due diligence to limit risks.
Structured settlements are typically designed to provide tax advantages for the Annuitant. Selling annuities to a structured settlement company can incur serious tax consequences. Oftentimes, the lump sum received for transfer of future annuity payments can place Annuitants in a higher tax bracket and increase their overall tax rate. Additionally lump sum cash will be taxed at federal and state levels.
Annuity payments are issued through insurance companies. They are under no obligation to approve annuity payment transfer rights or agree to the settlement sale. Annuitants should refer to their original structured settlement agreement to determine policy procedures and restrictions.
Purchasing and selling structured settlements is a process that requires a great deal of research. Serious legal ramification can occur if buyers are not authorized or experienced in buying cash flow notes. Investors can be placed at risk if the issuing insurance company goes bankrupt or refuses to transfer annuity payments.
Seek appropriate counsel for your structured settlement purchase and thoroughly understand all aspects of the transaction.
Learn more about buying and selling annuity payments in our purchase structured settlement article library. Find answers and resources to help make an informed decision about buying or selling annuity plans.
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