Wait, Before You Decide To Sell Structured Settlement

Wait, Before You Decide To Sell Structured Settlement

Wait - You may want to consider several factors before you make that final decision to sell structured settlement.You may save yourself a lot of headache if you consider some of the "Pros and Cons" of making such a decision..
Of course the biggest Pro for keeping your structured settlement is that it provides regular payments, which are tax free and protected by both federal and state laws.. This is not necessarily true for other financial assets or instruments. Structured settlements are also a good investment when done in conjunction with a government program that offers a guaranteed return, although the government programs generally have a lower return -- it's still guaranteed.

The primary purpose someone may think to sell a structured settlement would be the possible high return if they invested that lump sum in one of today's investment options. These generally are stocks and real estate. Although the stock market is a bit shaky at the moment (who know if it will drop even further), their are some really high return-on-investment (ROI) opportunities in the bottomed out real estate areas.

Another consideration before you sell your structured settlement is the pre-tax income from a prospective alternative investment as compared to that same income from your structured settlement. Additionally, there is a cost associated with the sale of a structured settlement, which is going to reduce your net proceeds. The cost should be big factor, and you should look at a comparison of your returns before shifting into a different investment.

One important tax consideration with a structured settlement is that you don't have to track or concern yourself with the updates and changes in tax law. Structured payments are generally tax free, but you should verify this with your tax consultant before making any decisions. When there are no taxes, this mean freedom from keeping up on the state and federal tax laws. With most other investments, you should seek professional advice as to the tax considerations of selling a structured settlement and reinvesting in another finance vehicle.

If you are someone with business experience, selling a structured settlement can be a source of capital for funding or expanding a new business. Many times you can sell just a portion of your settlement, so you may want to keep part of the regular payments and cash out only as much as you need to fund your business.

Before you give up the comfort of regular income that is guaranteed by a structured settlement, always check with your attorney and tax specialist. More importantly, it is a legal requirement to seek such advice in many states.

One final advantage in favor of other investments is the freedom to control and manage your own funds. This can be a big advantage for those experienced in making such financial management decisions, such as forex trading, or other liquid investments. With your lump sum, you can be ready to participate in any opportunity that presents itself.

Whatever the reason for considering a sale of your structured settlement, make sure you get professional advice from an attorney in your jurisdiction and a tax consultant.