Archive for April, 2009

Structured Settlement Transfers–Completion Time

Sunday, April 19th, 2009

One of the most common questions a seller asks before deciding whether to sell a structured settlement is how long it will take to complete the transaction and get paid the sale proceeds.

At Genex Capital we are committed to completing each sale and getting our customers paid in the shortest time permitted by law.

Having said that, it is important to understand what the law says in that regard and what the procedural hurdles are to complete a typical sale transaction.

1.  From acceptance of the offer to receipt of documents takes approximately —1 day

2.  There is a mandatory statutuory cooling off period of between 3 to 10 days during which time the transaction must not proceed.  See for example the Virginia Structured Settlement statute requiring 3 days.  We generally allow 10 days on account of the most common time requirement. –10 days

3.  It often takes 2 to 3 days afterward for the documents to be returned to us by seller and for us to prepare them for our lawyer. –3 days

4.  Once delivered to our lawyer, the case must be prepared for a court application, necessary follow up with seller and preparation of evidentiary documents such as the seller’s affidavit. –7 days

5.  The case is then filed with the court and a mandatory statutory 20 days notice is given to the insurance company involved. See Virginia Structured Settlement Statute.–20 days.

6.  We await our turn for a court hearing date generally in the county where the seller resides.  Time lapse to the hearing date depends on that particular court’s availability and can vary widely from county to county.  –20 days

7.  Once the hearing is completed and assuming the court transfer is approved, it generally takes 7 business days to complete the final stages and complete the transaction.  –7 days.

8.  If the seller does not have a copy of the annuity policy then a benefits letter must be requested to the applicable insurance company.  This can add up to 2 weeks to a case.–2 weeks.

The total time to completion then can range from 63 days (2 months) to 78 days (2.5 months) in normal cases.  Complex cases may take longer to complete.

Please note that some Genex Capital competitors promise to complete a transfer within 3 to 4 weeks from inception.  This is not possible without violating State law and thereby incurring a 40% excise tax on the transaction which will, in turn, jeopardize the completion of the transaction.  See Internal Revenue Code s.5891.

I hope this clarifies the time requirements to complete a structured settlement transfer transaction.  A Genex Capital Customer Service Expert would be happy to answer any other question you may have.

State Guaranty Associations

Saturday, April 11th, 2009

In our April 4, 2009 Blog Report we suggested that one of the reasons for wanting to sell a structured settlement annuity may be the concern for the continued financial viability of the insurance company making the payments.

It is important to know that most States have a Guaranty Association that will pay some but not necessarily all of the life insurance annuity payments in the event the insurance company is unable.  In that regard:

1.  The applicable State Guaranty Association is usually that of the State where you are resident at the time of the insurance company default;

2.  The particulars, amount of coverage, and contact information for each Guaranty Assocation can be found here;

3.  If you move from a State with higher coverage to a State with lower coverage (ie from Washington State to Michigan) and the insurance company defaults after you relocate then you would likely only be eligible for the reduced covereage of the new State of residence.

4.  All coverages are conditioned on there being sufficient funds in the applicable State Guaranty Association.  

If you want to learn more about the coverages in your particular State we suggest that you contact your State Guaranty Association and follow up.

To Sell or Not to Sell your Structured Settlement

Saturday, April 4th, 2009

A structured settlement annuity (”Structured Settlement“) is designed to provide tax free payments to injured persons and/or their dependents so as to fund such things as  living expenses, health care expenses, education needs and other signficant financial needs over an extended period of time.

But times change, and so do one’s needs.  

You may now be in a position where you:

–no longer have the periodic expenditures you thought you may have.

–have credit card debt piling up accumulating interest charges of 25% or more annually

–may be subject to foreclosure proceedings on your home and in need to cash to protect the roof over your head

–want to fund an unexpected medical procedure or education program

–want to take advantage of low house values and buy a home for you and your family

–are concerned about the continued financial viability of the insurance company making your payments.

If you are experiencing one or more of the above concerns, then it is right for you to consider selling some or all of your structured settlement payments.

Both Federal and State laws make it possible for you to sell  your Structured Settlement without paying any taxes on the proceeds.  To do so you must complete a Structured Settlement transfer transaction with a company such as Genex Capital    whereupon we will arrange for a mandatory court approval process at our cost and have a judge determine that the transaction is in your best interest.

Before making a final decision, you should consult reputable transfer companies and get competing price quotes.  Not only is it important that you get a fair price for your Structured Settlement but you also will want to go with a company that has the strength and experience to be able to complete your transfer in a fast and efficient manner and you should not have to pay any costs associated with the transfer.

Ultimately the decision to keep or sell your structured settlement is a big step.  Take your time and carefully consider your options.

We at Genex Capital would be happy to assist you and answer any questions you may have.  You can call us toll free at 800-257-3110 and speak to one of our Customer Service Experts.