As a recipient of a structured settlement, you are guaranteed the security of a dependable revenue stream to be received in accordance with the settlement. Before negotiating terms to sell a structured settlement, you should seek financial advice from a reputable CPA, financial planner, or tax attorney. Not only do you need to understand all of the consequences of a sale or transfer, a financial planner will also assist in determining your future needs and provide an estimate of a sufficient amount of lump sum necessary to replace the periodic payments. Because the future is uncertain, there is simply no way to be certain about your future financial needs. A structured settlement provides an option to meet your current needs. A professional financial advisor acting on your behalf will evaluate your specific needs and help to determine whether or not selling part or all of your structured settlement is the right course of action. Legal considerations aside, there are definitive financial implications and only a professional financial planner, CPA, or tax attorney can help determine if selling your structured settlement is in your best interest.
There are many reasons why someone might consider selling or transferring all or part of their structured settlement. Besides current financial hardships, a recipient might consider selling to pay off outstanding debts or to finance other endeavors. Consulting a professional financial planner or tax attorney can help to navigate through extremely complicated and sometimes confusing information. If you have been researching the sale or transfer of a structured settlement, you are more than likely discovering there are significant tax penalties imposed. A professional financial advisor will be able to provide information on comparing the impact of paying the income tax as opposed to taxes on capital gains from reinvestment or paying off higher interest loans and credit cards. It must be understood from the beginning that when you sell all or a portion of a structured settlement, the lump sum amount will be less than the full settlement amount. Although the cash can be immediately used to pay debts, medical expenses, make large purchases, or make investments, the recipient will receive a smaller amount of the projected sum of the payments because the structured settlement broker has to account for inflation, fees associated with the settlement, and of course, the broker’s percentage. There are inherent risks associated with selling all or part of a structured settlement and only a qualified financial planner can provide the facts necessary to make this decision. In step #4, Deciding What to Sell, we will discuss the options that are available for consideration.
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highest possible price for your payments.
