When someone agrees to sell structured settlement or annuity payments to a third-party, they will need to enter into what is called a structured settlement transfer agreement or some may refer to it as a structured settlement contract. We receive many questions on this agreement, which we will help you understand in this blog. This document sets the requirements for completing the structured settlement transfer, the terms of the transfer along with exhibits that support completing the transfer of your payments. Below will walk through each of these items so that you have the necessary information to complete your agreement.
There are certain requirements for transferring payments to us at Mainstreet Funding that you should know. These requirements are partially mandated by a statute and others are necessary just to complete the transaction. First, it is important to understand what we mean by a state statute. Back in the early 2000’s there was a statute put into place which governs how structured settlement payments can be sold. A statute is simply a law enacted by a legislature. Under this statute there are certain requirements for your structured settlement transfer including receiving a disclosure statement, having a mandatory waiting period(different period of time in each state) and the most important aspect of the statute is that a judge must approve the transaction prior to receiving money from us. The judge must determine that the transaction is in your best interest and sign an order approving the sale.
What are the different parts of the structured settlement transfer agreement?
Once you have received a disclosure and waited the mandatory waiting period, you are eligible to enter into a structured settlement transfer agreement. The transfer agreement is composed of the payments being sold, the amount you will receive, the requirements for completion and responsibilities of each person selling payments. For Mainstreet Funding, the terms of the transaction are reflected on what is called a terms rider. The terms rider sets forth the payments being sold, the amount you will receive and which company is making the payments. The rest of the agreement will refer the these items reflected on the terms rider.
Another requirement for selling structured settlement payments is that the payments are free to be purchased; meaning no other party has rights to the payments whether from another transfer or from many other judicial actions. Another requirement of your structured settlement transfer is that you have provided proof of the annuity, the case has been Sample Structured Settlement and Release Agreement(sample shown here) and your ability to contract. The proof is usually in the form of an annuity contract, a settlement and release agreement and identification. You may need to provide additional support if your background includes bankruptcy, divorce, child support, liens or judgements.
An additional requirement for transfer, is that it is necessary to receive an order approving the sell of the payments. As mentioned early, a judge will need to approve the transfer of the payments, which includes determining that the transaction is in your “best interest”. The best interest standard is somewhat subjective, however in most cases what the judge is trying to determine is that you are using the money you receive today to better your situation and that the funds are being used for a need not a want. For example, approval would most likely not be obtained if the reason for selling is to buy a luxury car, however buying a house when you have grown out of the apartment that you lived in may well get approved. We can help guide you through this process.
Lastly, the terms of the transfer require that the insurance company provide for acknowledgement of the transfer. In many cases the insurance company or annuity provider will agree to the transfer of the payments prior to the hearing if the transaction follows the statute and each party agrees to certain conditions. In this case the parties involved will enter into what is called a stipulation. This document provides for approval by all parties to the transfer. In some cases the order approving the transfer of the payments needs to be served upon the insurance or annuity company and they will provide confirmation that they will comply with the order.Although there may be additional requirements as each individual case is different these highlight the main requirements under the structured settlement transfer agreement.
What are the exhibits attached to the structured settlement transfer agreement?
Along with the requirements set forth in the transfer agreement, you will need to execute certain exhibits which support the transfer of the payments. These exhibits include a spousal consent. We want to ensure that husband and wife both agree with the transaction. You may also execute an affidavit of independent advice. This document affirms whether you choose to seek independent advise or not. It is our desire and the desire of the statute that each person selling structured settlement payments, has been counseled by a third-party. Most states don’t require that you seek independent advise and in most states it is your choice, we at Mainstreet Funding encourage it. Again, in most states it is your choice.
What if I need help understanding the structured settlement transfer agreement?
Although, the structured settlement transfer agreement may seem overwhelming when you first see it, our hope and desire is that you would understand and feel completely comfortable prior to executing this agreement. If any part of the agreement is unclear our team members, here at Mainstreet Funding , are available to assist you in answering all your questions until you are completely satisfied. Call us today at 1-404-939-0029 and let us help.