Federal Legislation
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.
