by John Darer CLU ChFC MSSC CeFT RSP CLTC
Structured settlement annuities cannot be bought and sold however, the right to receive structured settlement payments can be bought and sold. It’s a critical distinction for investors, who may be misled into thinking they are buying an annuity and its associated protections.
Structured settlement annuities are a form of qualified funding asset that is used to fund a negotiated future periodic payment obligation to a claimant/plaintiff or attorney as part of the consideration for the settlement of a claim or lawsuit. Structured settlement annuities cannot be purchased by individuals unless they are self-insured defendants buying them to fund a settlement obligation and have not entered into a qualified assignment.
Examples of Not Buying Structured Settlement Annuities
- Plaintiff agrees to settle lawsuit in which part of the proceeds are paid in the form of a structured settlement and funded with structured settlement annuities
- Investor buys part of the structured settlement payment rights from someone else’s structured settlement, from a website that lists secondary market annuities for sale. “Secondary Market Annuities” are not even annuities.
Examples of Not Selling Structured Settlement Annuities
- Someone receiving structured settlement payments is pulled into the tractor beam of a JG Wentworth commercial, exhibiting the tell-tale signs of “lemming jello”, calls 877-cash-now and willfully submits to “pennies on the dollar nirvana”.
- Someone receiving structured settlement payments lists part of his or her structured settlement payments for sale on a purported structured settlement exchange.
- Someone receiving structured settlement payments lists all of his or her remaining structured settlement payments for sale on a purported structured settlement exchange.
Structured settlement annuities cannot be bought or sold. Only the rights to payments may be bought or sold not the annuities.