Structured settlements were introduced by Congress as a means of guaranteeing tort victims a future income stream to support their needs and avoid overreaching the public machinery. A structured settlement parcels out compensation like lottery winners to the payee in the form of futuristic periodic payments and annuities rather than a lump sum. Structured settlements have been referred to as a double-edged sword to recipients due to their inflexibility. Occasionally, beneficiaries of structured settlements on the rebound of financial troubles need fast, immediate cash. With the unyielding nature a structured settlement, they have to comply with the legal red tape. Fortunately, some structured settlement buying companies have emerged to acquire payment rights in return for a lump sum award.
After my dad’s death in 2015, I inherited a plethora of assets and proprietorship rights. He had also been receiving payments under a structured settlement; I inherited the remaining annuity cash flows. The payments amounted to more than $7 million but payable in the distant future. I needed to consolidate my dad’s estate and pay off outstanding liabilities. The structured settlement payments fell under the assets head but were not liquid cash. I had to sell all payments to the highest bidder for a top-dollar amount that would boost the property and discharge the estate from insolvency.
Court Approval Pivotal In Factoring Transactions in Texas
In Texas, the law governing the transfer of structured settlement rights obligates the structured settlement funding companies to seek court approval. Court sanction for the transaction is a contractual and legal condition precedent to consummation of a transfer agreement. The court found the sale of the annuities and monthly installments was in the best interest of the estate and did not contravene federal or state laws. After a qualifying order, the structured settlement purchasing companies benefit from the exemption in tax.
What Was the Role of the Annuity Issuer or Insurance Company That Disburses Payments?
Annuity issuers feature in SSPAs as interested parties whose must give consent and before the sale of structured settlement payments. Annuity issuers should not be left on the sidelines in a factoring transaction and cannot be mere bystanders. In my case, the annuity issuer had a particular interest in the transaction in ensuring adherence to the law on the sale of structured settlement rights. By doing so, annuity issuers prevent claims for conflicting remittances and liabilities attendant to such omissions.
What is the “Split Up” Provision in the Texas Structured Settlement Protection Act?
The so-called “split up” stipulation in Texas is a rider that shields the annuity issuer against increased transactional costs when they have to split up payments amongst multiple payees. The Act does not prevent sellers from selling to two factoring companies but absolves the annuity issuer from all fees and expenses. Accordingly, I decided to sell all payments and annuities to amass the money for the benefit of the estate rather than incur money selling again.
Benefits of Converting the Future Income Stream into A One-Off Lump Sum
I transferred my future payment rights and got a lump sum that devolved to the estate’s assets within four months since I started selling. My dad’s annuity provided him $2000 per month and six lump sum annuities at an average of $100,000. The lump-sum monetary award though discounted benefited the interest as we received more money to boost the total assets. I paid off all debts, liabilities, and expenses related to the administration of the estate. The upshot was a good deal as I converted future cash flows into liquid cash at a fair present value.
Stone Street Capital can buy out your structured settlements at a lump sum by rendering a free quote, price offer, and taking documentation to court as your representative in the deal. They will file a petition, draft a relevant agreement and notify other parties.
J.G Wentworth can hurry up your court filing before a superior court judge to get you a lump-sum in a couple of shakes. The company shapes the industry finest standards and joins hands with the National Structured Settlements Trade Association to legislate in the US.
Peachtree can offer a handsome package for your structured settlement payments, streamlines the court applications, and disburses your lump sum monetary award within 2 or 3 days.