Owning a structured settlement annuity gives you a lot of benefits. The primary benefit that you could get from structured settlement payments is that your family and you are well covered financially for a longer period; another advantage is that these payments and also the interest earned on them are free from tax. It is legal to use this money either for any impending emergencies or for an investment with high yielding returns.

You can sell your structured settlement payments legally in US as per the federal law HR 2884, and this sale can be made without your paying any tax. Two-thirds of states in the United States also permit the sale of structured settlement payments in addition to federal laws. In order to become eligible for selling this without paying any taxes you should get the prior approval of the court.

Selling Your Structured Settlement

It is fairly easy to be approved in court for the sell of all or part of your structured settlement payments, as long as you can prove that there is a need for the money. The judge will review your case to see if the transaction will benefit you and your dependents.

In order to get a positive judgment from the court for selling your structured settlement payments you must be an adult with sound mind and you should have genuine reasons to prove that you are doing this in the interest of your and your family’s welfare. You ensure that you attend the hearing in the court on that day which may help your cause much. Court approval is not mandatory for selling your structured settlement payments; however the amount and interest will be taxed.

In most of these cases, the purchasing company you are associated with will be interested in buying your structured settlement payments. To facilitate finalization of the sale they will handle necessary legal formalities. You are not charged for this extra effort; however, without court approval, you may be liable to pay taxes on the money you receive.

It is necessary for you to get quotations from interested parties. Getting quotations from a number of companies is advantageous to you because it will give you a chance to select the best among them. You should send copies of the structured settlement policy to the purchasing company whom you select after running through various applications. The purchasing company will send you a disclosure document to sign. This document basically gives the conditions of this transaction. You must scrutinize the document thoroughly, sign it and return to the purchasing company.

In order to proceed further it is essential that the court approval is got and this is the next step in this process. Depending on your state of residence and your insurance company, the process can take up to 90 days. In majority of the cases the sellers get their money within 10 days after court approval.