Put crudely, the question is whether a smaller amount now beats a larger amount spread over years. Put usefully, it is two questions: what the conversion actually costs, and whether the purpose the money is for is one a scheduled payment cannot serve. The first has a number; the second does not, and the court will ask about both.
What the conversion costs
The gap between the face value of the payments you sell and the money you receive is the discount, and it is the whole price of the transaction. The trade body's reported range is between 9% and 18%, and a few points over a long stream is a very large sum. Florida's statute names the yardstick a court measures it against: discounted present value is the fair present value of future payments, determined by discounting them using the most recently published applicable federal rate.
What the money is for
A structure is good at paying for things that recur: care, rent, medication, a mortgage. It is bad at paying for things that happen once and are large: a house deposit, clearing a debt that is compounding faster than the discount rate, funding a business. Where the purpose is genuinely one-off, a partial transfer that raises exactly that sum and leaves the rest running is usually the answer rather than a choice between the two extremes.
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 structured settlement vs lump sum
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 finding it 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 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.