The Pros and Cons of Initiating a Structured Settlement Transfer
Taking some time to look at the pros and cons of initiating a structured settlement transfer is essential. You may receive advertisements claiming to be able to fund a transfer of your funds in your annuity to you quickly, inexpensively and in such a way as you can use the funds for anything you would like to. What is true is that you can sell your structured settlement payments and get a lump sum of the money that is owed to you. When you do this, though, there are good things and bad things to take into consideration. Here are some of the pros and cons of initiating a structured settlement transfer.
Time And Money
Pro: You can get the funds that are owed to you in your annuity all at once. This one time, lump payment gives you everything all at once to do with what you need to.
Con: Unfortunately, it does take at least 60 to 90 days for the process to happen. Don't believe the companies that promise a less amount of time.
Pro: You can use the funds to pay off bills, to help with investment, to purchase a home or even to fund college. The choices are endless in what can be done with the funds.
Con: A judge will need to sign off on the structured settlement transfer. This means that it can be denied if it is found not to be in your best interests.
Pro: Getting all of your money upfront can mean that you can reinvest it in any way that you would like to.
Con: You will pay a considerable fee by tapping into those funds. The process of initiating a structured settlement transfer is costly, with fees such as application fees, legal fees, closing fees and more to be considered. Taxes are also payable here. Whereas the structured settlement does not normally have any taxes applied to it when you accept periodic payments, the transfer is taxed.
There are many pros and cons out there. But, what is important is for you to sit down with a financial advisor and really determine what the best course of action for your funds is. In many cases, initiating a structured settlement transfer is a good decision. It allows you to get more of your money faster and allows you to then do more with it. While it may not make sense for everyone, having an idea of what the benefits and the bad side of doing so is will help you to make the best overall decision.