On the 22nd of January, 2002, President George W. Bush signed into law a bill that protects those who want to sell structured settlement payments for liquid cash that can better address their financial needs.
This law subjected all structured settlement payment sales to a court order to prevent sellers from being defrauded.
Without a court order, a tax amounting to 40% will have to be paid on the total amount of payments being sold.
The court order protects those who sell structured settlement payments from being defrauded.
This bill works in conjunction with state laws governing how selling structured settlement payments should be completed. It protects and helps those who want to sell structured settlement payments by making it clear that annuity providers will suffer no tax consequences because of these transactions.
The bill stipulates that annuity owners and providers neither currently owe nor ever owed taxes for selling structured settlement payments. The structured settlement buying industry was born to address the needs of recipients whose financial situations had changed.
