Structured Settlement Transfers

Written by Michael Federico
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When most people think about transferring money, they think in terms of moving a certain amount from one account to another. There might be a small charge involved for the service. However, people do not usually worry about losing any real money in the process.

The transfer of a structured settlement is very different. A structured settlement pays out on a regular schedule for months, years, or even decades. The schedule is not a flexible one. At least it cannot be altered by any insurance company or other group that might be handling it. However, the recipient can go elsewhere to get more money up front or sell off large portions of the settlement. However, this transfer of the settlement from recipient to settlement broker will most likely cost the recipient a substantial amount of money in the long run.

Saving Money on Structured Settlement Transfers

The IRS has ruled that a settlement that is tax-free will remain tax-free if it is sold for a lump sum. This, at least, means that a recipient who transfers payments to brokers for cash will not get destroyed on taxes. However, the rate he receives from the broker will not be one to one. If he is transferring $30,000 worth of future settlement payments, he will not receive $30,000.

There are companies that offer rates that are far superior to most on the market. They ensure that a person does not have to sell the majority of his payments in order to receive a significant amount of money. These brokers use strict criteria to come up with their rates and they do not change them simply to make more money. This type of firm is by no means the norm, but it is possible to find them with a little work.

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