As someone receiving a structured settlement as part of a payout for an insurance claim, you have money coming to you periodically. However, you may be thinking about selling your settlement to a company so that you can get one lump sum. If you want to do that, it is important that you know a few facts before you sell. Here are two things to consider before selling your structured settlement.
You May Have to Pay Taxes
Structured settlement payments are typically tax-free. This can be incredibly beneficial to you, as it allows you to have more money at your disposal. If you decide to sell your settlement to a company and get one large payment instead, you very well may need to pay taxes on that money. That can cut into the amount of money you ultimately receive and, what's more, have an effect on the rest of your finances at tax time.
Financial Guidance
You may think that having one large amount of money is preferable to receiving payments, but you need to be honest with yourself about your ability to effectively manage that much money. Will you end up buying luxury items with most of the money? Will you be able to resist helping family and friends when they ask for money? Can you honestly say that you would be a good steward of a great deal of money if you had it? By asking yourself these questions, you will be able to make the right decision about whether you want to sell your settlement.
If you do decide to take a lump sum by selling your settlement, it is important that you talk to a financial adviser who can give you guidance about the best ways to make sure that your money works for you. For instance, an adviser may suggest investing a portion of your money so it can continue to grow in value. An adviser can also help you set up a budget so that you can spend the money from your settlement in a reasonable way that will allow you to use the money, while remaining in a good financial position going forward.
Now that you have some things to think about before selling your structured settlement or structured settlement information, talk to a lawyer who has experience with these settlements. He may be able to help you get a new payment schedule set up, or if you do choose to sell, can help you find the right deal.
Share28 October 2014
Although I am far from perfect, I have focused on abiding by the local laws for the vast majority of my life. Unfortunately, about five years ago, I realized that I was being accused of a crime that I didn't commit. I thought about letting the trial run its course, but then I realized that fighting would be important to ensure my future. I teamed up with a great lawyer, and things became much easier overnight. My legal counsel told me what to do and what to avoid, and he was able to prove the facts in a court of law. This blog is all about choosing to fight charges.