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Cash For Structured Settlement?
By Jon Thomas
When accidents occur, whether an auto accident, slip and fall, medical malpractice, wrongful death, or any other non workplace related injury happens, structured settlements are often set up with insurance companies to pay for these tortious acts. People who are in involved in personal injury or insurance related cases elect to receive a series of payments over a substantial period of time rather than receive an immediate lump sum payment. These payments typically total more than the amount a person would have obtained for an immediate payment. The injured party (Plaintiff) goes through a process whereby they elect to take this protracted payment, and sign off on a "Settlement and Release Agreement" allowing the Insurer (Defendant) to purchase an annuity policy on the insured's behalf that would provide for monthly, quarterly, or yearly payments to the injured party, who now becomes what is called the Annuitant.

With the advent of new 2002 Federal Laws, and further State Protections, the injured party now has the right to get cash for their structured settlement by selling this annuity stream to an independent third party if he or she so desires. These periodic payments that flow from an insurance company annuity contract (called a structured settlement), may be transferred at anytime in the future for a lump sum today, but great care should be taken to ensure that the injured party obtains a proper court order. The reason for the court order is one of protection for the injured party, and that protection is twofold; first to protect the annuitant (injured party) from an unscrupulous transaction, and secondly, and just as important in our opinion, to preserve the tax free nature of the transaction. Without obtaining a court order, the proceeds received

would be completely taxable, a frighteningly foreboding scenario.

The structured settlement holder should be aware that these annuity sales have specific legal guidelines that differ from state to state. These specific elements must be adhered to strictly in order to complete the transaction. Typically, the injured party receiving the payment stream must execute (sign) a new transfer and assignment agreement disclosing all contractual terms and the price to be paid.

At this point the injured party may be wondering how difficult it is for them to get cash for their structured settlement, since the procedure seems complex. In fact, the sale of a structured settlement annuity is a simple, straightforward process that any institutional funder has done thousands of times, and will handle all the paperwork properly. The only thing the injured party need do is make certain they provide the funder with the proper paperwork required in a timely fashion. This process is really a simple cookie cutter transaction. Once in court, the potential sale is announced to all interested parties and then is submitted to the court for their approval.

Bear in mind that this procedure is a process, and typically will take at least 90 days to consummate. In order to expedite the process, the injured party needs to make certain that they respond immediately to requests for information and paperwork from the funding party. The institutional funder should have a vast knowledge of the structured settlement business, and have consummated numerous transactions, and offer you referrals. This is for your protection and an acknowledgement that all proper legal guidelines will be adhered to. If your structured settlement company doesn't meet these requirements, use someone else.
Jon Thomas has been involved in finance and insurance, specializing in emerging growth markets since 1979. He continues to write articles to help you get cash for structured settlements.

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