Getting Cash for Your Structured Settlements

If you've received a hefty sum of cash, the money may be paid to you in increments, a plan known as a structured settlement. Whether you've won the lottery, been awarded a settlement in a lawsuit, received a large inheritance, or getting annuity payments, the process is the same. You will be receiving a set amount every month or quarter for a set number of years. There are quite a few advantages to receiving structured settlements which include tax avoidance (if your lawyer is sharp), funds reaching to a far point in the future where money may be tight, and the settlement possibly being used in conjunction with other types of benefits and/or public assistance.

However, there are some people that may want their money right away and don't want to wait years for their entire settlement. They may be getting a low return on their investment and want to cash in their annuity to invest in another financial instrument. This is the time that they may decide to receive cash for their structured settlements. Or, they may opt not to cash in the entire settlement but just a portion of it. While there are quite a few companies that are advertising to buy out structured settlements, be aware that it's not unlike rediscounting a large check. The whole amount won't be paid; rather it's a discounted amount since there are quite a few costs involved.

Next, the company that receives the settlement should be legitimate, not on that will give problems upon collection time. They must make sure, though, that they may sell the structured settlements. There may be some restrictions on doing so, particularly if it is a legal settlement that is intended for sale or if it is expressly forbidden on the contract signed. Receiving a lump sum payment will also leave the seller with some very large tax bills. With all this in mind, it is best to ask for the assistance of both a lawyer and accountant in settling this sale. They will be able to give the final figures that will be earned and also look over any contracts to make sure that the seller is protected in the future. A court may also need to approve of the sale.