by John Darer CLU ChFC MSSC CeFT RSP CLTC
Structured settlement annuities can’t be bought and sold
However, the rights 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 (receivables) may be bought or sold, not the annuities.