Structured settlements are designed to offer people financial security over extended periods of time. Converting a structured settlement into a lump sum payment typically involves paying an appreciable fee. Generally speaking, financial advisors do not recommend cashing any annuity or structured settlement unless the holder is faced with a truly insurmountable financial crisis. It is all too common for intermediary financial firms to make it sound as if settlement conversion is an instantaneous process. In fact, some companies slyly imply that for their customers, lump-sum checks are just “one call away.” In actual fact, no intermediary can decide the timeline for any settlement conversion. Supervising judges are responsible for deciding whether lump-sum conversions are permissible. If a judge decides that such a procedure can go forward, that judge is solely responsible for determining the time table of this legal process.
Quite a few different types of people have need to convert structured payment plans in lump-sum payments. These include people receiving lottery payments, people who have won lawsuits and people receiving annuities. People nearing retirement age should know that if they convert their payment plans into lump sum payments, they may have to pay exorbitant tax bills. This generally occurs if people cash in before the age of 59 and a half.
People should exercise extreme caution when seeking firms to help with lump-sum settlement conversions. From a purely financial standpoint, giving up a structured payment plan is a gravely serious move. In some cases, people who move to receive lump sums can lose ten percent of their overall settlements. Still, extreme financial difficulties can call for drastic measures such as these. For example, people often seek cash infusions if they can’t pay critical bills such as rent or power bills. Emergency home repairs and costly medical expenses can also inspire people to seek faster access to large sums of cash. Whatever their reasons for cashing in their structured settlements, people should never approach these decisions lightly.
Although some companies involved in helping structured settlement recipients may engage in careless advertising, this doesn’t mean these companies can’t provide valuable services for their clients. On the contrary, the best structured settlement companies act as tough negotiators working on the behalf of ordinary people. Because these negotiators have gone through this process so many times, they understand exactly how to ethically work the system in order to achieve success for their clients.
According to the National Structured Settlements Trade Association (NSSTA), nearly $6 billion in new structured settlements are awarded to Americans each year. Even during times of economic downturn and retrenchment, people continue seeking to trade their settlement plans for greater access to cash. In this environment, it is truly important for people to have access to expert advice regarding their structured settlements. The best structured settlement firms provide people with information and empowerment.
Judges may expect payees receiving structured settlements to show need before awarding lump sum payments. Typically, judges in these types of cases do not look kindly on people giving up years of financial security for frivolous, short-term enjoyment. If a payee is facing a serious financial shortfall, however, it shouldn’t prove difficult to prove need. Structured settlement advisors can help people prepare the documentation they need to enter courtrooms with confidence and self-assurance.
A judge may also take into consideration the reputation of the structured settlement company assisting the payee with the conversion process. From beginning to end, this entire process can take anywhere from 62 to 90 days. Of course, specific laws and regulations regarding this type of procedure vary greatly depending on one’s jurisdiction.
It is fortunate that people today have so many options when it comes to selling their annuities and structured settlement payments to third parties. This is exactly the type of financial flexibility that has made the United States a financial center for the world. Hopefully, judges and courts nationwide will provide people with greater freedom to change the terms of their structured settlement payment plans. Only time will tell how structured settlements will change in the long-term future. Currently, top structured settlement companies include J.G Wentworth, Fairfield Funding, Peachtree Financial and Olive Branch Funding.