Structured settlements can provide valuable assurance of income for your future. However, immediate financial needs can emerge, and take precedence over a guaranteed income at a later date. Selling your structured settlement for a lump sum can help you overcome your pressing budgetary needs.
As you decide to sell your structured settlement, consider these five points. They will assist you in understanding how getting cash for structured settlements could change your financial outlook.
1. Be Clear on Your Reasons for Selling
Money presents a temptation to almost everyone who depends on it for their quality of life. Rationalizing a need to obtain a large, lump sum of cash when it’s available can be far too easy to do. A structured settlement could represent financial stability for many years to come, so the decision to sell one should not be taken lightly.
Be honest with yourself regarding your reasons to sell your structured settlement. Buying a reliable vehicle, paying emergency medical bills, or placing a down payment on a home all represent valid reasons to sell all or part of your settlement payments.
2. Budget for the Future
A structured settlement provides you with payments you can depend on. This income may be necessary for you to meet your monetary obligations, retire comfortably, and otherwise achieve financial stability in the years to come. Getting cash for your structured settlement offers an immediate boost in funds, but may upset the balance of your future budgetary needs.
When making the decision to sell your settlement, consider creating a long-term budget. This will ensure you can manage your money in the future, as well as meeting immediate concerns.
3. Consider the Tax Benefits & Requirements
When you receive a lump sum of cash for structured settlements you are typically exempt from income taxes. Thus, there is no tax effect to transfers. If the lump sum is rolled into an IRA, only the money you choose to take out each month will be taxed.
4. Understand your State Laws and Other Pertinent Legal Considerations
Federal law states that sales of structured settlements must receive court approval. In addition to that requirement, each state has its own laws regarding these transactions. Arming yourself with knowledge regarding the requirements you must meet is an important step in receiving cash for structured settlements.
Work closely with the company you have chosen for the sale of your settlement. Preparation is key to receiving approval for your sale.
5. Choose an Experienced Structured Settlement Buyer
Selecting the right buyer for your structured settlement is the most important step you can take to ensure you receive the money you need without unnecessary complications. Choosing a company with experience and excellent customer service is critical.
For a better understanding of your individual situation and the options available to you, contact the Novation experts at 1-888-979-3740.
*Novation is not a financial advisor or consultant and strongly recommends that you speak to a lawyer or accountant before making any significant financial decisions.
