Seen from the outside a sale is an offer and a cheque. Seen from the file, it is a transfer agreement, a disclosure statement, a notice to three or four interested parties, an application to a court and an order. Knowing what is in that file is the best defence against a deal that is being rushed.
The documents, in order
First a transfer agreement setting out which payments are being sold and for what. Then the disclosure statement, which in Florida must reach the payee at least 10 days before the date on which the payee first incurred an obligation with respect to the transfer, in bold type no smaller than 14 points in size. Then the application to the court, with notice to the obligor, the annuity issuer and any irrevocably designated beneficiary, all of whom the statutes name as interested parties.
Who can object, and why that is useful to you
Because the obligor and the annuity issuer are notified, a transfer cannot be done quietly, and either can appear. That is not an obstacle put in your way; it is a check on the buyer. The same is true of the beneficiary named under the annuity, whose interest in guaranteed payments after your death is directly affected by a sale. A process with several people entitled to read the numbers is harder to do badly.
The federal rule that makes it universal
Congress made the court step effectively compulsory without legislating for state courts at all. a federal excise tax falls on a person who acquires structured settlement payment rights in a factoring transaction unless the transfer is approved in advance in a qualified order, and the section is quoted in full on the United States row of the record: a final order, judgment or decree finding that the transfer does not contravene any federal or state statute and is in the best interest of the payee, taking into account the welfare and support of the payee's dependents.
Questions people ask about sale of structured settlement
Does a court really have to approve this?
Yes, in every state. The federal exception in 26 U.S.C. 5891(b) applies only where the transfer was approved in advance in a qualified order, and the order must find the transfer is in the best interest of the payee, taking into account the welfare and support of the payee's dependents.
What is the single biggest variable in the price?
The discount rate, and after that how far in the future the payments you are selling fall due. The reported range across the market is between 9% and 18%.
Do you take a share of what I get?
No. Buyers pay a flat fee for the enquiry itself, never a share of the discount and never anything contingent on a transfer completing.