Selling A Structured Settlement

Structured settlements are designed to provide long-term financial resources, but if your circumstances change, selling some payments may be in your best interest.

Structured settlement annuities are excellent options in personal injury lawsuit cases because they are tax-free and guarantee income over time. However, structured settlement agreements are final and will not allow for unplanned changes. In these cases, many structured settlement payees choose to sell part or all of their annuity in exchange for a large, cash lump sum.

There are many reasons why a person may decide to sell a structured settlement annuity, including:

How to Sell Your Structured Settlement

The CBC Settlement Funding team has more than 50 years of experience, so we fully understand the nuances of a structured settlement sale. To us, the process is best broken down into five easy steps.

Getting Advice From A Lawyer or Accountant

CBC Settlement Funding makes selling a structured settlement annuity easy, but the process is still a legal transaction. For this reason, we always recommend our clients confer with their attorneys before moving forward with an annuity sale. If you have an accountant or tax professional, we also recommend our clients seek advice from these professionals.

Your attorney or accountant can lend an extra layer to the proceedings, as they know your individual situation and can help ensure selling your structured settlement annuity is in your best interest. The nuances of selling annuities also vary from state to state, so your attorney or accountant will be able to answer any questions about selling your structured settlement in your area.

Sell Your Structured Settlement Annuity For Cash

We understand your personal finance needs may change over time, so CBC Settlement Funding is proud to offer you options that best suit your financial needs, including purchasing part of or your entire annuity for a lump sum of cash. If you’ve spoken to your lawyer or accountant and believe selling your structured settlement is the right choice for you and your family, call us today.

CBC Settlement Funding provides free purchase quotes, competitive rates, and in some instances up front cash advances within 72 hours. We make the legal process easy. We’ve been earning our clients’ trust with close to 75 years of combined industry experience and are proud of our A+ rating with the Better Business Bureau.

Length of Time Required

It’s very difficult to estimate how long it will take to secure your lump sum payment because selling your payments is a legal process. Each state law governing the sale of structured settlements is different, and this will affect the length of time required to complete the transaction. In general, however, the entire process takes an estimated 45 – 60 days.

CBC Settlement Funding

CBC Settlement Funding can provide clients with a lump sum cash advance in exchange for selling structured settlements to our company. Clients can contact us today for additional information on customized cash options to fit their unique financial needs.

FAQs to Sell Your Structured Settlement

Is Selling Structured Settlement Payments Legal?

The answer here is yes – and 47 states have laws in place regulating selling structured settlement payments for the protection of both the seller and the buyer. Three states – New Hampshire, North Dakota and Wisconsin – do not currently have any regulations governing structured settlement sales. However, it is still possible for residents of these states to sell their structured settlements to a funding company and have that transaction carried out under the laws of the state in which that company or insurance carrier is domiciled.

Do I Need To Show Up In Court To Sell My Structured Settlement?

There is a court proceeding involved when you sell annuity payments or are looking to receive lump sum cash for structured settlement payments. A judge must approve the transaction before it can go forward; this is what takes the most time. There is a possibility that the judge may deny the petition if s/he does not feel that the sale is in your best interest.

Normally, the seller of a structured settlement or annuity payout will have to appear in court. Structured settlement buyers such as CBC provide their own legal experts who will file all necessary paperwork and on the day of the hearing, will appear in court to present the transaction. If there are any issues, our attorney will discuss this with you directly and communicate directly with the judge.

Is it My Decision Alone to Sell My Structured Settlement Payments?

Other than the fact that the sale of a structured settlement or annuity payments must be approved by a judge, as long the settlement was awarded to you and/or you are the sole beneficiary of such payments, there is no legal reason why you need to get permission from anyone before selling your payments or annuity to a qualified structured settlement buyer.

Can I Sell Part Of My Structured Settlement?

When it comes to selling a structured settlement or annuity payments in exchange for a lump sum settlement payment, you have numerous options. You can, sell the settlement in its entirety, sell a portion of it or sell the right to receive payments for a specified period.

Note the wording in the last point: “right to receive payments.” This is what you actually own, not the settlement or annuity itself. A structured settlement or annuity is owned by a legal entity, such as an insurance company or other Obligor; it is this entity that directs the disbursement of payments to you as beneficiary. What you do have – and what you are selling or transferring – is your right to receive these payments.

Is There Any Risk Involved in Selling a Structured Settlement?

When dealing with qualified, reputable structured settlement companies that have had experience in providing cash for structured settlement payments to beneficiaries of such arrangements, there is no risk as far as losing your money is concerned. Reputable structured settlement buyers have a transparent process, and take every step to insure that you are fully aware of the terms under which you will be receiving your settlement money.

However, there are some issues to consider when selling structured settlement payments. Keep in mind that the sale and purchase of structured settlements and annuity payouts is a business; structured settlement buyers provide this service to make a profit. As with any business, there are operating costs that come out of those profits; building or office lease payments, marketing costs, employee salaries, etc. Among these costs are those associated with the legal paperwork and court filings. Any costs to be paid by you will be disclosed in plain language in your transaction documents.

It is also important to know the percentage of loss you will take when selling structured settlement payments. Because the transaction itself costs money and because it involves a for-profit business, you can expect a reduction on the total value of your structured settlement. Obviously, you want to minimize this as much as possible.

On the other hand, getting the highest payout may not necessarily be for the best. Do your due diligence and understand who is actually paying the costs associated with the transaction itself, as this can have a significant effect on your final payout. If you have any questions at all, make certain that you get clear answers before accepting the offer – and if necessary, consult your own attorney or CPA.

What Other Documents Will I Need To Sell My Structured Settlement Payments?

Depending upon the state you live in and settlement terms, you may need the following items:

Settlement Agreement and Release documents from your court case stating the terms of the settlement and releases. These may be obtained from your attorney, insurance company, or from the courthouse where your case was argued or settled.

Annuity Contract and Benefits Letter from the insurance company issued on official corporate letterhead that lists your payment schedule. It may be necessary for you to make a written request to the insurance company in order to receive this.

Recent Check Stubs, Deposit Slips and/or Bank Statements to prove that you are receiving monthly payments.

If you were under the age of 18 when your case was settled, you will need to provide a copy of your Order Approving Minor Claim and Dismissal documents containing court approval, allowing you as an under aged person to enter into the settlement.

If the defendant’s insurer assigns its obligations to you over to a second party, you will need to provide Qualified Assignment documents.

Will I Get Taxed When I Sell My Structured Settlement?

Typically, a person who elects to receive cash for a structured settlement – that is, selling their structured settlement to CBC – does not incur tax liability on the sale. The settlement was non-taxable when you received it, and remains non-taxable when you sell it in exchange for a lump sum. Be aware, however, that although your lump sum payment for a structured settlement is non-taxable, should you invest it, any returns will be subject to the current capital gains tax.

For more information regarding a potential structured settlement tax, and legal impact of such a transaction, you should consult with a legal and/or tax professional.

What Is A Structured Settlement Transfer And Is It Legal?

When you sell some of your future payment rights for a cash lump sum payment, you are transferring the rights to those future payments to a third party otherwise known as a factoring company. This is known as a Structured Settlement Transfer (SST) or structured settlement factoring transaction.

A factoring company such as CBC Settlement Funding will provide the annuitant or payment recipient with cash today in exchange for a certain number of future payments. For individuals who find structured settlements too restrictive, having the flexibility of accessing their future money now is a viable option.

It is perfectly legal to sell some or all of your future annuity payments for cash. When it comes time to sell these payments, forty-eight states and the federal government has enacted additional consumer protection statutes establishing strict conditions when an annuitant sells some or all of their future payments.

What Requirements Must One Meet To Complete a Structured Settlement Sale?

Aside from the fact that you must be of legal age and of sound mind and judgment, the only requirements that the seller of a structured settlement or annuity payments must have is:

Evidence of the benefit through a settlement agreement or annuity contract
Proof of identity
Approval from the court

Other requirements for a structured settlement sale are set forth under the Internal Revenue Code. Beyond this, however, there are no particular requirements or qualifications that one must meet in order to engage in this type of transaction.

What Is The Present Value Of My Structured Settlement Payments?

The present value is how much your future money is worth in today’s dollars. Think of it as reverse compound interest; where instead of determining the amount you would need to invest now in order to have a specified balance in the future, you’re looking at the future balance and determining the value in today’s dollars.

When you sell your future structured settlement payments to a factoring company, they will determine the present value of your payments using a mathematical equation. This equation uses number of years, interest rates as well as inflation rates to make that determination.

What Are The Common Pitfalls Of Selling Structured Settlement Payments?

Not researching the company first– Do your homework and research the company before getting a quote. Check with your state’s Attorney General’s Office and look the company up on the Better Business Bureau’s website to see if they’ve had complaints about their business practices.

Taking a verbal offer – Get a concrete written offer. If the company won’t put it in writing go elsewhere. Reputable firms always give written offers.

Not reading your paperwork – Sometimes companies will hide their fees or other costs. It is important to know what you’re paying and why before you sign. If you don’t understand the wording ask or get advice from an independent third party.

Getting only one quote – If you don’t shop around you may not get your best offer. Don’t rush into a transaction with the first or only offer you receive.

Going with someone you don’t trust – If your representative gives you a run-around or won’t take the time to explain things, they may not have your best interest at heart. Go with a company that respects you and provides top-notch customer service.

Letting emotions cloud your judgment – Just because your financial situation is pressing doesn’t mean you should make hasty decisions. Do your homework and make an informed decision.

Not showing up for court – It is always in your best interest to go to court to explain your situation to the judge. Don’t let others determine your fate.

Do I Need An Attorney To Sell My Structured Settlement?

Consulting with an attorney or financial advisor about the sale of your structured settlement is a smart move. It also gives you a chance to ask questions and clear up any doubts you may have about the process.

The factoring companies that buy structured settlements often have legal professionals on staff. Still, just as you might seek a second opinion after receiving a medical diagnosis, you also should review documents or questions with your own attorney before committing to a structured settlement sale.

There is another reason to have an attorney involved. Regardless of the circumstances or the nature of the structured settlement, the transaction will need to be reviewed and approved by a judge in a court of law. A very good reason for this is that structured settlement transactions that are not approved by the court are subject to a whopping 40 percent federal excise tax.

Let CBC Help

Our team of experienced, caring professionals will make the process of selling some or all of your structured settlement or annuity payments easy.