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The Structured Settlement Act Explained

Recently, one of my clients told me that they needed to get the Structured Settlement Act explained. Simply stated, this act sets legal guidelines that all settlement companies must follow. The main intent of the act was to protect consumers against exploitation. However, it must be noted that there are loopholes in the guidelines, so beware.

When a person is going to sell their settlement, or the future income-stream, for a lump-sum cash payment, they better be aware of the fact that it will be at a discount. They will not receive what the total amount was going to be when paid out until the end. This discount is offered to entice an investor to lay out the lump-sum for the benefit of the income-stream, and for tax purposes.

The Structured Settlement Act states exactly who is to be part of the process when planning on selling it for a lump-sum. The court of original jurisdiction must be petitioned for approval to make the transfer. Judges base their decision on whether or not the sale of the annuity will be beneficial to the Claimant and their family. It could be denied if the Judge decides it is a raw deal.

Preparation Of The Documents

All the documents are usually prepared and filed by a company like Einstein Structured Settlements. All of the correct forms will be submitted to the appropriate court having jurisdiction of the case. They can also assist with an Appeal, if the request is denied. Besides the Federal Law, most of the states have their own Settlement Act. The laws can vary between the states, and should be examined. Some structured settlements are drafted in such a way that you cannot sell it for a lump-sum of cash.

The legislature passed this act in order to make sure that if you want to sell your settlement, it will first be scrutinized in a court of law. The act also provides guidelines for a court to decide if the settlement should be approved in the first place. The court has to determine if the insurance company that is going to provide the annuity is going to be around long enough to make the payments until the end of the time period.

Professional Help Is Recommended By The Act

The Structured Settlement Act makes very clear the requirement to use an attorney and a financial advisor to aid the process of decision making. While this may not be brain surgery, it is a very complicated process, and everything must be done correctly. If you are not trained in this field, you should use a professional that does have the proper certifications and training, before you make a mistake that could hurt you in the future.

The Act was passed to help you, but it can also set-up obstacles to overcome in certain respects. This is why I tell my clients to not even think about making a move without hiring competent counsel, and to use a well-known and trusted settlement company like Einstein Structured Settlements.

This my friends, is The Structured Settlement Act explained.