Five Things You Shouldn’t Do with Structured Settlement Cash
Selling all or part of a structured settlement or annuity can help a family meet a big financial goal, or tackle many kinds of financial emergencies. Those who hold a structured settlement or annuity often use lump sum payouts for essentials like education, medical care, and housing. What some structured settlement holders don’t know is that there are particular standards for a sale process. Without attention to what kinds of cash payouts are possible, the person who is trying to sell a structured settlement might come out empty-handed.
Every structured settlement deal has to go before a judge for approval. This legal requirement effectively screens proposed settlement payouts for a few key requirements. One of these is whether the reason for the proposed payout is considered “financially sound” and in the sellers’ “best interest”.
Generally, judges will approve structured settlement proposals for meeting important financial goals. For instance, a structured settlement payout is often appropriate for a needed home renovation, to meet a mortgage payment or pay down debt. Structured settlement lump sum payouts can also be approved for things like the following:
- Tuition costs
- Paying for a hospital stay or other large medical bill
- Investing in a new small business
In these cases, the judge will likely see that these purchases are things that the individual or household needs to improve long-term quality of life.
Other kinds of structured settlement sales may not pass muster if the judge feels that the proposed purchases are things that are not really necessary or valuable over the long term. Here are some things that a judge probably would not o.k. a structured settlement sale for:
- A flashy new car, a specialty vehicle, or luxury brand
- A family vacation
- A home theatre or stereo system
- New clothes, jewelry, or accessories
- Collectibles
Every structured settlement holder who wants to turn part or all of their settlement into a lump sum needs a responsible structured settlement buyer, not just to help assess their chances of approval but to bring experience and knowledge to the transaction. A good structured settlement buyer will have a solid process in place so that the payout gets approved in a timely manner.
At CBC, we have helped many clients achieve a structured settlement sale. We know the good and the bad when it comes to setting up these sales, and we are able to effectively guide our clients so that they avoid unpleasant surprises later on during the legal process. We provide critical feedback on whether we feel a particular structured settlement sale proposal will work. It’s all part of the caring and dedication to detail that we bring to every client’s financial situation.
Let us work with you to get the settlement lump sum payout that you want, in a realistic and practical way.