Structured Settlements

What is a structured settlement?
A structured settlement is an agreement between a plaintiff (the injured person) and a defendant under which the plaintiff receives payment for damages over a period of time. Instead of receiving the money in one lump sum, the plaintiff receives it over a period of time. Since there is not one large payment, there can be tax benefits to a structured settlement and provide more benefit than one lump sum. If the settlement payments are funded through the purchase of a fixed annuity or a US Treasury Securities, they can receive preferential treatment under the tax code and in some cases are tax-free. The structured settlement is usually supported and maintained by a financial institution and can be individually tailored to the needs of the plaintiff.

Can I sell my structured settlement and get the cash?
Yes, it's possible to sell your structure settlement or fixed annuity. There are many purchasers of structured settlements, who will cash you out of your annuity. You will not get the full value of the settlement, but if you are in need of the cash for a larger purchase or investment, it is possible to sell your annuity. The purchaser will continue to receive your annuity payments. If you are planning on selling your structured settlement, make sure you get as many quotes as possible to find the best price. There is a large discrepancy between organizations that purchase these settlements.

What about lottery payments or just regular annuities?
You can also sell those too, if you are in need of the lump sum. Most lotteries will pay your winnings over a long period of time. This means that if you want to make a larger purchase, you will have to cash out your lottery payments. Many of the same companies that will buy your structured settlements will also buy your lottery payments for a lump sum. All other annuity products and most other regular payments that you might receive from a financial institution can be sold to someone else for a lump sum.