The simple answer is “yes.” If you are receiving structured payments from a court or insurance settlement, if you won a lottery jackpot with annual payments or if you have some other type of annuity payment, the sale is regulated in 47 states.
Essentially, a structured payout or annuity is an insurance asset that can be liquidated if necessary for a lump sum.
It has not always been possible to get cash for a structured settlement; prior to 2002, many settlement agreements contained language prohibiting the sale, transfer or acceleration of these payments. However, that year a federal law nullified the intent of the language by confirming that the tax attributes of a structured settlement would not be impacted by a subsequent sale made in compliance with applicable state law. Today, even though some settlement agreements may still contain such language, in these cases the federal law takes precedence.
These transactions are regulated under state and federal law, however, and require court approval. This is for the protection of all parties involved; the judge will want to make certain that the sale of the structured payout is in the seller’s best interest.
In three states – North Dakota, Wisconsin and New Hampshire – there are currently no laws that have been enacted to regulate the transfer of structured settlements. It is still possible to transfer structured settlement payments if you live in one of those states. Typically if you live in a state without a Structured Settlement Protection Act, and want to get cash for structured settlements, the law of the state where the insurance company is located will be applied. So, for example, if you live in Wisconsin and your insurance company is located in Illinois, the transaction would be governed under the Illinois Structured Settlement Protection Act. There may be tax consequences in such cases, however; residents of the three states mentioned above should consult with a tax attorney or accountant before committing to such a transaction.
CBC Settlement Funding can provide you with a lump sum cash advance for all or part of your structured settlement. Contact us today for more information on customized cash options to fit your financial needs.