If you purchased an annuity directly from the annuity issuer with your own funds (or inherited the annuity), you generally do not need to get court approval to exchange the right to receive the payments for a lump sum. This answer is different, however, if you are getting annuity payments as a result of a lottery winning or structured settlement. In the case of lottery payments or structured settlement payments, there is a court process that must be followed
Many people contact us that have purchased an annuity but due to a change in circumstances, are interested in exchanging some or all of the annuity, for a lump sum. Whether your payments are guaranteed or life contingent, we can provide you an offer or offers so that you can evaluate whether liquidating it is a preferred option.
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Guaranteed Annuity Buyouts
When your annuity is guaranteed, we can provide you an immediate quote for a lump sum. We only need information about the size and timing of your payments (i.e., how much they are and when are they due), as well as the name of the annuity issuer that is making the payments to you.
A guaranteed annuity is a type of annuity that provides a guaranteed income stream for a set period of time. Guaranteed annuity payments are made regardless of whether the original payee is living at the time the payments become due. The annuity issuer guarantees the income payments for a fixed schedule.
Life Contingent Annuity Payment Buyouts
In order to get you a price for the sell life contingent annuity payments, we will need to gather a little more information from you than if you were selling guaranteed payments. This is because the payments are tied to your life and therefore your health and other factors come into play when determining the lump sum we can offer.
What Type of Annuity Payments Can be Sold for a Lump Sum
It is important to note that not all annuity payments can be sold for a lump sum.
Workers Compensation Annuity Payments
While this is a state by state inquiry, generally speaking workers compensation can NOT be sold for a lump sum
Annuity Payments form a Pension
generally speaking pensions, and other retirement funds, can NOT be sold for a lump sum
Structured Settlement Payments
Subject to the state court approval process where you live, structured settlement payments CAN be sold for a lump sum. This is true whether the payments are guaranteed or life contingent
Longshore and Harbor Workers Compensation Act
this payments can NOT be sold for a lump sum regardless of what state you live in.
You will NOT be able to sell payments you receive for a disability for a lump sum.
Inherited Annuity Payments
The answer to this depends on the type of annuity you inherited. Many types of inherited annuities CAN be sold for a lump sum.
Lottery Annuity Payments
Yes, you generally CAN sell lottery annuity payments but there are state specific restrictions.
For a host of reasons, these payments are generally NOT subject to be sold for a lump sum of cash.
Frequently asked questions
After certain paperwork is filed with the court in the county where you reside, a Judge will set a Hearing. Generally speaking, the Hearing focuses on whether selling a structured settlement is in your best interest. Lottery annuity sells, while requiring court approval as well, generally do not face the same level of scrutiny as the sell of structured settlement payments. The process to get the lump sum can take anywhere between 30-60 days (on average).
Like any other asset, once you sell the payments to a buyer, you are no longer entitled to receive them. You want to avoid “seller’s remorse”. Accordingly, we strongly recommend you take your time to consider whether proceeding with the sell is in your best interest. We similarly believe that you should take your time to shop your payments to a variety of buyers to ensure you are comfortable with the amount any buyer offers.