People who have obtained structured settlements through their workers compensation claims or personal injury are curious whether or selling your structured settlement in return for a lump sum amount, with all the construction jobs and other hazardous work environments there are a lot of people in this situation. There are a lot of commercials on tv and the radio that advertise to these people saying things like, ‘its your money; use it when you need it,’ and promise a cash payment in return for their structured settlement. People act on these commercials because they are either curious or have a real financial need for the up-front money. Unfortunately, selling a structured settlement is not always possible, and it is not necessarily a smart move financially.
The only time to make sure a structured settlement is right for you is at the time the settlement is offered, obviously afterward it will be too late. It may be in your best interest to pursue a lump sum settlement, or you may choose to receive periodic amounts in addition to less frequent larger payouts or you may choose a large lump sum to be issued at a further date.
If you take the time to make sure you choose the option that meets your needs at the beginning you will be able to maximize the value of your settlement and get the greatest long term benefit from any structured portions later on.
The MOST important thing to consider when choosing the option to best meet your needs, is deciding whether or not your future earning ability was impaired by the accident. If you can no longer work as a result you will need to have a means to earn income over a long period of time,make sure you consider this when selling your structured settlement.
Roughly 2/3 of the country has laws regarding structured settlement payouts, and whether or not you can sell them; additionally there are federal laws that dictate the sale of a settlement. Expect to obtain court approval for the sale and make sure you are aware of any and all transfer laws that your state may enforce. In some cases the settlement is structured in a way that prevents the sale of a structured settlement, usually because of the legal language within the contract itself.
Most settlements are designed to put the injured party at significant tax advantages; so selling the annuitie may adversely affect the seller. For example, the settlement payments themselves are not usually taxed but the transfer or reception of a large lump sum in exchange for the sale may be eligible for taxation.
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