Florida Law: Selling Structured Settlement Payments

If you are considering selling your future structured settlement payments for an immediate lump sum in Florida, it's important to understand the laws surrounding this type of transfer. In addition to federal law, 49 states have their own laws that govern the process of transferring the rights of a structured settlement annuity.

Florida Structured Settlement Law

In Florida, the law surrounding the transfer of rights to future structured settlement payments is § 626.99296. Transfers of structured settlement payment rights.

(a) A direct or indirect transfer of structured settlement payment rights is not effective and a structured settlement obligor or annuity issuer is not required to make a payment directly or indirectly to a transferee or assignee of structured settlement payment rights unless the transfer is authorized in advance in a final order by a court of competent jurisdiction which is based on the written express findings by the court that:

1. The transfer complies with this section and does not contravene other applicable law;

2. At least 10 days before the date on which the payee first incurred an obligation with respect to the transfer, the transferee provided to the payee a disclosure statement in bold type, no smaller than 14 points in size, which specifies:

a. The amounts and due dates of the structured settlement payments to be transferred;

b. The aggregate amount of the payments;

c. The discounted present value of the payments, together with the discount rate used in determining the discounted present value;

d. The gross amount payable to the payee in exchange for the payments;

e. An itemized listing of all brokers’ commissions, service charges, application fees, processing fees, closing costs, filing fees, referral fees, administrative fees, legal fees, and notary fees and other commissions, fees, costs, expenses, and charges payable by the payee or deductible from the gross amount otherwise payable to the payee;

f. The net amount payable to the payee after deducting all commissions, fees, costs, expenses, and charges described in sub-subparagraph e.;

g. The effective annual interest rate, which must be disclosed in the following statement: “Based on the net amount that you will receive from us and the amounts and timing of the structured settlement payments that you are turning over to us, you will, in effect, be paying interest to us at a rate of   percent per year”; and

h. The amount of any penalty and the aggregate amount of any liquidated damages, including penalties, payable by the payee in the event of a breach of the transfer agreement by the payee;

3. The payee has established that the transfer is in the best interests of the payee, taking into account the welfare and support of the payee’s dependents;

4. The payee has received, or waived in writing his or her right to receive, independent professional advice regarding the legal, tax, and financial implications of the transfer;

5. The transfer agreement provides that if the payee is domiciled in this state, any disputes between the parties will be governed in accordance with the laws of this state and that the domicile state of the payee is the proper venue to bring any cause of action arising out of a breach of the agreement; and

6. The court has determined that the net amount payable to the payee is fair, just, and reasonable under the circumstances then existing.  

Click here to read the full Florida law.

Federal Structured Settlement Law

To sell your future structured settlement payments, you'll need to comply with both state and federal law. These laws are in place to protect you.

In 2001, Congress enacted the Victims of Terrorism Relief Act, which includes a provision relating to structured settlement factoring transactions (26 U.S. Code § 5891). This provision imposes a high excise tax on structured settlement factoring transactions unless the transactions are “approved in advance in a qualified order.” The Act defines a qualified order, and it requires that the order be issued “under the authority of an applicable State statute by an applicable State Court.”  Since then, 49 states and the District of Columbia have enacted state statutes setting for the procedures for court approval of structured settlement factoring transactions.

Qualified order. --For purposes of this section, the term “qualified order” means a final order, judgment, or decree which--

(A)  finds that the transfer described in paragraph (1)--

(i)  does not contravene any Federal or State statute or the order of any court or responsible administrative authority, and

(ii)  is in the best interest of the payee, taking into account the welfare and support of the payee's dependents, and

(B)  is issued--

(i)  under the authority of an applicable State statute by an applicable State court, or

(ii)  by the responsible administrative authority (if any) which has exclusive jurisdiction over the underlying action or proceeding which was resolved by means of the structured settlement.

26 U.S. Code § 5891 also offers some helpful definitions and other rules for selling structured settlement rights. Read the full law here.

We have a few articles that might be helpful if you are considering selling your structured settlement payments:

Transferring the rights to your future payments is permanent, and it's not the best choice for everyone. We encourage you to speak with a financial expert about your asset and to weigh all your options if you are in need of immediate cash.

CrowFly is committed to creating a positive experience that is built on trust, accessibility, and transparency for people who have structured settlements. For more information, contact CrowFly at 833-CROWFLY, email info@crowfly.com, or get started with a structured settlement quote.