by John Darer CLU ChFC MSSC CeFT RSP CLTC
Can You Sell a Structured Settlement Annuity Contract?
Nope. However, a highly credentialed but mistaken settlement planner says you can, in a discussion of “the process of selling a 
structured settlement” found on their website at time of publication.
“Transferring the annuity contract: Once the court approves the sale, the annuity contract is transferred to the funding company, and the claimant receives their lump-sum payment” they say.
What is the Annuity Contract in a Structured Settlement?
The annuity contract in a structured settlement is a qualified funding asset as defined in the Internal Revenue Code Section 130(d).
Who Owns the Annuity Contract in a Structured Settlement?
The annuity contract in a structured settlement is typically owned as a qualified funding asset by a qualified assignment company. In certain cases, such as with claims settled under the Federal Tort Claims Act (FTCA), the structured settlement annuity is owned by the Defendant
What is a Qualified Assignment Company?
A qualified assignment company is a special purpose company that serves as the fulcrum of a structured settlement transaction. Please refer to the Step 2 and Step 3 in the structured settlement flow chart below.
Structured settlement documentation makes it clear that the Payee has no rights of ownership in the qualified funding asset
But companies like JG Wentworth must be buying something if all these people have been scoring all that “cash now”. What the heck are they buying? The magic words are “structured settlement payment rights” or ” structured settlement receivables”. What do factoring companies sell to investors?
“Receivables Purchase Agreement” is not Buying an Annuity
So if you’re raising cash from your structured settlement you are selling receivables or structured settlement payment rights.
Fellow settlement planners and structured settlement consultants, please be mindful of inaccuracies.
Last updated February 4, 2025