Before accepting any payout option from settlement buyers, it is critical to understand all the options that are available. Individuals that own structured settlements often seek ways to obtain a lump sum buyout by giving up their monthly, quarterly or annual payments. It is imperative to know that settlement buyers who purchase annuities are companies in business to generate profits from every purchase, which often results in a low offer or bid.
Once the decision has been made to accept the payout from settlement buyers, the beneficiaries can often pay for unforeseen medical expenses, ongoing living expenses or to pay down existing debt. Nearly every state in the union has strict statutes that govern how structured settlement annuities can be sold. Many of the laws allow individuals to sell their remaining payments only by proving they have met strict requirements that include:
- Listening to Professional Advice – Many judges require that the structured settlement annuity beneficiary listen to professional advice to fully understand the details and financial terms of the buyout.
- Time to Cool Off – Many courts require a specific amount of time to cool off in case the beneficiary changes their mind about selling the annuity.
- Talking with the Judge – Usually, before the sale or buyout can be completed, the beneficiary will need to participate in a hearing to allow the judge to take full consideration of the beneficiary’s best interest.
It is beneficial to approach at least three different companies or settlement buyers interested in purchasing the annuity. Every company should be reputable, well-funded and established in their industry, with years of business under their belt. In some states, the seller will have to present the offer to the judge in court to receive approval for the buyout. It is always a wise decision to consult an attorney before ever selling a settlement, or agreeing to an offer.