Federal legislation requires Sellers of Structured Settlements to Seek Court Approval
Selling your structured settlement payments to meet unplanned financial needs got easier with a newly formed law.
In a bill passed on January 22, 2002, President George W. Bush signed into law a bill that protects the rights of the owners of structured settlements. This bill makes it mandatory for individuals to seek court approval when they sell their structured settlement payments. The bill works in conjunction with state laws directing how these transactions will be completed.
The law has already been passed in more than thirty states and people are indeed making full use of it. The bill has benefited and protected the individuals financially.
Alsongside, the bill is specific that the annuity providers will suffer no tax consequences as a result of these transactions.
Insurance companies were always concerned for individuals who sell their structured settlement payments that the annuity obligors could suffer tax consequences. This became a source of very contentious litigation between insurance companies on one-side and settlement purchasers and annuitants on the other.
This bill is absolutely unambiguous and clear. It states that annuity owners and providers do not now owe nor have they ever owed taxes as a result of these transactions.
This federal law is now in the hands of the states to implement with due legislations as soon as possible. The insurance industry, the legal community and members of congress, have all come together to help the annuity owners and have succeeded in their endeavour.
The Public will now have the protection of the law when entering into any and all agreements to sell structured settlement payments. It is now up to the discretion of the injured party or their representative to make the decision, rather than the inflexible insurance companies.
This industry was created in answer to the needs of recipients whose situations had changed. It is time that they should gain access to their money now.