A settlement is a financial instrument used to provide regular and tax free monetary installments usually as compensation for injury or harm caused on a plaintiff. It is vital, as it helps in settling unforeseen expenses that may arise before the full recovery of the plaintiff. There are a number of steps followed in selling an annuity.
Process of selling a settlement
Start by coming up with a decision to dispose of the annuity. This should not have an effect on the financial future of the beneficiary and plaintiff. Proceed to looking for a suitable discount rate for the annuity. At this stage, look for the interests of the firm, its experience in completion of court order transfers as well as its general ratings from previous customers.
Upon selecting the desired company, engage it in the process by starting with the paperwork process. Ensure it accurately checks your documents ensuring that they are complete in the end. Some of the documents required at this stage are valid identification cards of the plaintiff and attorney, annuity agreement as well as the third party’s documents to be transferred to.
A judge must approve the sale of the annuity. This has to be done after a full hearing of the validity of reasons behind the sale. Sellers must be in position of proofing beyond doubt that they are not putting the financial future of beneficiaries in jeopardy.
Get your money after full approval by the judge. A judge signs an order authorizing the transaction. The order is then sent to the concerned insurance company. At times, depending on the financial ability of the insurance company, a seller maybe offered an advance as one waits for the court order to be approved. The money is usually tax free. This is what most lawyers would advise since the money is taken as a personal income from an injury.
However, the process of selling a settlement needs to be done with much care. When selecting a company to work with, look for one that does not pressure the plaintiff. At times, brokers may be involved as they may have direct contact with different customers.
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