If you own a structured settlement annuity, you might receive a lot of benefits. Structured settlement payments provide long term financial security for you and your dependents, and the payments and earned interest are tax free. In case you need the money for any emergent situations or you find that you can invest this money in a better way you are entitled to do it as per law.

The federal law HR 2884 protects individuals who want to sell their structured settlement payments to meet unplanned financial needs; this can be done without any tax implications. Two-thirds of states in the United States also permit the sale of structured settlement payments in addition to federal laws. However, you must keep in mind that the tax free status is possible only if the court approves such a transaction.

Selling Your Structured Settlement

Getting approval for the sale of your structured settlement payments from the court is relatively easy if you have solid reasons to prove that you require this money. The presiding judge will go through your case and give his judgment based on whether this sale will be in you and your family’s interest or not.

In order to get a positive judgment from the court for selling your structured settlement payments you must be an adult with sound mind and you should have genuine reasons to prove that you are doing this in the interest of your and your family’s welfare. Keep in mind that appearing at the hearing may help your cause. Even if you don’t get court approval for selling the structures settlement payments you can still sell this, however you will not get the tax free status for this.

In all probability, the purchasing company with whom you have been discussing might be willing to purchase your structured settlement payments. They may also be willing to handle the legal issues to facilitate finalization of this sale. They will not charge you for this extra effort they have taken for this; however, in the absence of court approval, you are liable to pay taxes on the money you receive.

Quotations have to be obtained from various purchasing companies for purchasing the settlement. You will almost always benefit by getting multiple quotes. In case you find a suitable purchasing company out of the various quotes received, you should send to the purchasing company copies of the structured settlement policy. The purchasing company will send you a disclosure document to sign. This document explains the conditions of the transaction. You must scrutinize the document thoroughly, sign it and return to the purchasing company.

The next step in this is beginning of the process for court approval. Depending on your state of residence and your insurance company, the process can take up to 90 days. In majority of the cases the sellers get their money within 10 days after court approval.

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