Earlier before the Structured Settlement Protection Act took place, there were many activities that were termed as abuse. Hence many states elected to implement this law modeled after a template created and enacted by the National Conference of Insurance Legislators. Now, there are almost 46 states following this law, protecting those who have received structured settlements in the past and want to change to a lump sum settlement for part or all of any remaining payments.

Structured Settlement Protection Act

There are some components that are similar in many states laws that cover transfers. For example, the statements of full disclosure should be sent to the seller prior the transaction is complete. The seller can inquire about every aspect of the transaction terms and how it will affect the amount of money that is received. The terms should be mentioned in a straightforward manner and the language should be kept so simple that it could be easily understood by a relatively uneducated person.

As per the laws or the statutes, a notice must be given to certain parties as part of the transaction, who in turn will be affected by the actions when the transactions is completed. This mandate prevents a deal from being completed without some interested parties being made aware of components included within the transaction.

It is a good idea if the seller consults with the appropriate professionals about the terms of the proposed assignment of future payments that is included in the statutes in most states. These professionals will be very knowledgeable about the legal matters. Sometimes, they might be tax consultants or financial planners.

The most significant clause in the statutes is that it has to be approved by the court and it should be in the best interest of the seller. The court is required to look at the best interests of any dependents.

Structured Settlement Protection Act is designed to protect every common individual. Since the approval of the transaction is done by the third party i.e. the court after a thorough review, this protection is as good as the review and ruling by the judge or fact finder in the case.

More information about Structured Settlement Protection Act:

http://apps.leg.wa.gov/rcw/default.aspx?cite=19.205&full=true

http://en.wikipedia.org/wiki/Structured_settlement

This entry was posted on Thursday, June 28th, 2012 at 4:48 pm and is filed under Law. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.