A settlement paid in such a way where the defendant, the plaintiff’s attorney and a financial representative agrees of paying a settlement in installment instead of paying a huge amount at once is called a structured settlement. This usually happens when a plaintiff decides to settle the case through a large amount of money. Most of the time, a structured settlement is done by purchasing one or more annuities that guarantees the future payments needed to be made.
A structured settlement can be paid depending on whichever schedule the parties choose. The settlement can be paid through annual installments for a number of years, or it may be paid in regular lump sums every couple of years.
One benefit of having structured settlements is the ability to avoid taxes. With a proper set-up, a settlement like this can significantly reduce the plaintiff’s tax obligations as an offshoot of the settlement itself. There are even cases when it becomes totally tax free.
A structured settlement can also protect the plaintiff from losing settlement funds intended to pay for future care needs. Sometimes, structured settlements can also help protect the plaintiff from himself especially if he or she is not good in handling money, or does not have the capability to say no to relatives who want to “share the wealth.” Almost always, a large settlement is rapidly exhausted without the plaintiff knowing.
People with structured settlements are usually approached by companies who are interested in buying the settlement. Some are just plain curious if you have the intentions to sell your structured settlement in exchange for a lump sum buyout. Almost two thirds of the states apply different laws regarding this matter – some prohibits people to sell structured settlement and tax free settlements are also subjected to federal restrictions as far as the sale to a third party is concerned.
Some insurance companies also implement a policy of not assigning or transferring annuities to third parties as well as discouraging the sale of the settlements. However, depending on your location and the terms of your annuities, it is still possible for you to sell structured settlements if your state allows it.
Always keep in mind that companies who buy structured settlements from people have only one goal – to gain profit from their purchase, that is why sometimes their offers are a bit low. You can however try approaching more than one company if you wish to sell a structured settlement, just to make sure that you get the highest payoff.
Make sure that the company who wants to buy your settlement is well established and well funded. You do not want to trust your money to some fly-by-night company disappearing or going bankrupt even before paying you the buyout amount.
If you need help selling your structured settlement, annuity or lottery payments,
contact us today. We are here to answer your questions and help you obtain the
highest possible price for your payments.
