How To Get A Lump Sum From An Injury Award With A Structured Settlement Transfer
It’s possible, following an accident, that you might need a lump sum and a structured
What can I do, I need money!
settlement transfer. It can help you to overcome the somewhat restrictive laws and policies in place in many states, where there is probably too much protection for the good of the individual. The problem arises when someone is given a court award as a result of an injury sustained for which someone else is held responsible. In many states, it is considered that awarding the full amount in one go would be counter-productive.
The reasoning behind this is that the money will be needed on an ongoing basis over time, so that is the best way to deliver it. In many cases, this is perfectly true and the system works quite well. There will always be cases, however, when it will be better for money to made available faster than it is. The more progressive states are happy to allow the recipient of an award to make a bid to the court for more of the money to be released. Where this is possible, it is clearly the best option to take as it keeps the income as part of a court award.
There may be a perfectly good reason why the money is needed now. This could be as simple as the recipient wanting to clear some outstanding bills just so that they can concentrate on rebuilding their life, or it could be an emergency need for some equipment which will be needed as a result of the accident. Of course, even though someone has suffered an injury they may still be exceptionally skilful at investing money, and may just want to take control of their future anyway.
Where the state laws are so restrictive that there is no possibility of appealing to the court, there is no real option other than seeking a structured settlement buyout. These are offered by companies who are prepared to pay out a lump sum immediately in return for buying the contract and receiving the money in installments. While this type of annuity buyout is a way of getting hold of your money early, it does carry several drawbacks.
Firstly, you are no longer getting money as a result of a court award, and this has negative tax implications. Secondly, you are having to put your trust in a private company, and with a lot at stake. Any time you involve a private business, you are inevitably bringing in an extra element of risk. That element may be small, but it still definitely exists. Make sure you carry out extensive research into both the laws in your state, and the company you will be entrusting with the structured settlement transfer.
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