Vermont Law: Selling Structured Settlement Payments
If you are considering selling your future structured settlement payments for an immediate lump sum in Vermont, 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.
Vermont Structured Settlement Law
In Vermont, the law surrounding the transfer of rights to future structured settlement payments is Subchapter 5. Transfers of Structured Settlements.
(a) No direct or indirect transfer of structured settlement payment rights shall be effective and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to any transferee of structured settlement payment rights unless the transfer has been approved in advance in a final court order based on express findings by the court that:
(1) the transfer is in the best interest of the payee taking into account the welfare and support of the payee's dependents, considering all relevant factors, including:
(A) the payee's ability to understand the financial terms and consequences of the transfer;
(B) the payee's capacity to meet his or her financial obligations, including the potential need for future medical treatment;
(C) the need, purpose, or reason for the transfer; and
(D) whether the transfer is fair and reasonable, considering the discount rate used to calculate the gross advance amount, the fees and expenses imposed on the payee, and whether the payee obtained more than one quote for the same or a substantially similar transfer.
(2)(A) the payee has been advised in writing by the transferee to seek independent professional advice regarding the financial advisability of the transfer and the other financial options available to the payee, if any, and:
(i) that the payee has in fact received such advice; or
(ii) that such advice is unnecessary for good cause shown.
(3) the transfer does not contravene any applicable statute or the order of any court or other
Click here to read the full Vermont 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:
- How to sell your structured settlement
- Do you have a good enough reason to sell your structured settlement annuity payments?
- CrowFly average discount rate (or how we get sellers more money)
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.
If you are interested in becoming an investor in a structured settlement payment, you need a team who knows how to help you get the best deal. That team is CrowFly. When you need to sell your structured settlement payments, you need a team who knows how to help you get the best result. That team is CrowFly.