In many instances, those who win a civil lawsuit are awarded financial compensation as a result. In some cases, the financial compensation is awarded with a lump sum payment, but many times, the compensation is provided in the form of a structured settlement annuity. This annuity provides you with equal monthly installment payments that may continue for years or decades. While some find it beneficial to receive payments spread out over time, others need or prefer to receive it in full up-front. You can sell your structured settlement annuity to receive the funds you desire, but you may not know how to go about selling it.
Who to Sell Your Structured Settlement Annuity To
There are several important steps to take to determine who to sell your structured settlement annuity to. First, you need to ensure that you are legally able to sell the annuity. Some states have established laws that prevent these annuities from being sold or that require you to wait a specified number of years before selling them. In other states, you may need to get court approval before selling the annuity, so you will need to work with your attorney to obtain approval. Once you have determined that you have the legal right to sell your annuity, you need to find a buyer. There are several reputable companies that buy annuities, and a good starting point is to check with the company that structured the annuity payments initially. However, it is wise to shop around to find the best deal before you finalize your plans to sell the annuity. This is because the payout as well as the fees can vary from buyer to buyer. Ensure that the company has a good rating with the Better Business Bureau and that they have a license to complete this type of transaction.
How the Annuity Sales Process Works
Selling a structured settlement annuity is a rather straightforward process when you work with a reputable company, but you may benefit from gathering required paperwork together first. Most buyers want to see the annuity paperwork as well as payment stubs, your tax returns showing the annuity payments over the course of a full year and even the legal judgments showing the establishment of the annuity and documents showing your legal right to sell the annuity. Be prepared to receive an amount equivalent to 65 to 80 percent of your annuity’s face value when you sell it. If you are not agreeable to the loss of 20 to 35 percent of the face value of the annuity, you may need to consider alternatives to selling, such as taking out a loan.
Ensuring That You Get a Great Deal When Selling Your Annuity
Most legitimate and honest buyers will give you an offer of up to 80 percent of the value of your annuity, but there are some variations to this. Even a few percentage points difference can equate to a substantial amount of money. Furthermore, some may value your annuity differently. Work with an annuity broker up-front to first determine the current value of your annuity before you shop around for offers. Your broker likely will assist you with the shopping process so that you obtain the best deal possible, but you will need to pay your broker a fee for his or her services.
Selling a structured settlement annuity makes financial sense for many people. This money can be used to buy a new home with cash, to get specialized job training, to pay off high interest debts and more. By following these steps, you can make the best decision about how to proceed with your annuity sale.