It's My Structured Settlement, Should I Sell It Now?

By PhoenixV

It's your money

If you have received a structured settlement and you are trying to decide if selling it might be the best option, there are some important things to consider.

Your structured settlement may have come with some important tax benefits. When you sell your structured settlement or structured settlement payments, you may not have those same tax benefits.

Part of the attractiveness of a structured settlement are those potential tax breaks. Those tax breaks add value to the settlement itself, in a way. By selling your structured settlement you may negate that added benefit and conversely may have to pay taxes eventually on the proceeds of the sale of your structured settlement.

Usually companies are willing to buy your structured settlement for a lump sum because their offer could be less than what the structured settlement is worth. Companies are in business to make money, and that's what they are trying to do in this case.

You may need it later

If you are legally allowed to sell your structured settlement, know that one reason for structured settlements, themselves, were designed in some cases to protect the people from spending the settlement too quickly. If you sell your structured settlement for a lump sum and wind up spending it all within five to ten years, you may put yourself in a financial bind, if the settlement was for some disability. If you are unable to work and have spent the money, your physical well-being may be in jeopardy. Yes, it is your money, but you may really, really need it later.

I think the best advice is to keep your structured settlement, at all cost, and invest the payments you receive as wisely as possible. This will allow you to keep the tax benefits and not lose anything on selling the structured settlement too cheaply. Unless you intend to buy a house, pay for a college education, or to invest in companies that buy structured settlements, I wouldn't even consider it.