A former plaintiff looking to sell their structured settlement will oftentimes call their lawyer for help. Thus, you have a choice to make. You can either provide counsel based on the client’s personal needs, or ignore the request and leave them to navigate through the sea of offers they will receive via the internet. With both your advice and the safeguards put into place by the Structured Settlement Protection Act, your client can end up with a fair deal.
The Structured Settlement Protection Act of 2002 mandated a number of safeguards for transactions involving the sale of a structured settlement. This legislation outlines disclosure and procedural requirements, including application and court approval mandates. For instance, the Act states that a full disclosure of payment information must be provided, as well as full disclosure of the expenses and fees that will occur as a result of the transfer. The Act also calls for the payee to be advised to receive professional counsel on the financial advantages and disadvantages of the transfer to assist them in understanding the consequences of the choice to sell. Further, the payee must be informed of their right to cancel within a predetermined timeframe.
After such disclosures, the transfer must finally receive court approval. Such approval should only result once the court has concluded that the transfer is in the best economic interest of the seller. The execution of the court order generally allows the annuity payments to then be transferred and directed to the entity that has acquired the rights through the legal transfer, and, upon payment, the seller is then free to use the lump sum received for their own economic needs.
As lawyers, it is most important to ensure that your client has fully vetted his/her decision, has exhausted all other options, and that he/she requests bids from multiple companies in order to ensure a fair deal.
Attorney Hank Didier founded Vantage Capital Consultants to offer potential sellers of structured settlements a better choice.
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