Because selling your payments means appearing before a judge in court, it's good advice having an attorney at your side who will make sure all the paperwork is legal and your rights are protected.
The only way to transfer or sell your structured settlement payments is to have your proposed agreement approved by a judge in a state court near where you live. State and federal statutes require it. Some also require you to have legal representation. With an experienced attorney at your side in court, you should be confident the judge will say yes to your sale. If your state does not mandate you have an attorney, you likely will have to a waiver if you choose not to seek independent counsel.
There’s a reason why states ask you to get a lawyer: This is a sale process that must go through a brief court process, and almost every structured settlement contract must be signed by a judge. You want an attorney with the expertise and knowledge of applicable annuity laws and the workings of the local court system.
Another reason to engage an attorney is that judges often ask questions of sellers in open court, and you need to be prepared to answer. When your transfer request makes it to a court docket, your attorney should know a little something about the judge handling your sale. That knowledge can only help you.
Longtime observers of the structured settlement process say that judges generally take one of two positions when evaluating these transfers. The secondary annuity market is a highly specialized area of the law. Chances are if you hire an attorney to represent you, he or she will know the personality of the judge working your case.
The first point of view is of a parent. The judge sees himself as your caretaker, and he’ll view any financial transaction with wariness. This means you – with the help of your attorney – could have to show that your short- and long-term best interests are for this structured settlement to be sold.
The second point of view is more omniscient. The judge acts as a caretaker of the process, the law, and holds a libertarian view of your role. That is, if you feel as if selling all or part of your structured settlement is what you want to do, then you should get your money to spend in the manner you outline in your contract.
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Not only is the judge required to determine that the transaction you’re requesting is the best choice for your needs today (as well as your future financial security), your lawyer is equally responsible for making sure that you have made the best decision possible in order that you may attain the most desirable outcome regarding your structured settlement sale.
If you choose not to hire your own attorney and decide to use the lawyer your buyer appoints for you, you’ll normally meet to discuss your sale a few days before your scheduled court hearing. The attorney should prepare you for your hearing, including preparing you for a question-and-answer session by the judge. The attorney should review a range of questions you are likely to get asked in court.
You’ll be required to explain why you’re selling the rights to your future payments, how you intend to spend your cash-out and how you expect to maintain a steady and satisfactory income level in the future without the certainty of future payments.
Your appointed attorney has almost certainly presented similar transfer agreements in court and knows the judges in each jurisdiction. That extra personal knowledge – how best to approach a particular judge with an understanding of his or her habits, likes and dislikes, etc. – is helpful when you discuss your case in court.
Regardless if you’re represented by your own attorney or by one appointed for you, you should listen carefully to your lawyer’s advice. After all, you do share a common goal. You both wan the transfer to go through. Your attorney wants to get the job done, and you want your money.