New Minnesota Structured Settlement Transfer Law Gives Judges More Info
New protections are being put into place for individuals who sell their future structured settlement payments for cash in Minnesota. The legislation, effective August 1, 2014, will provide judges with access to the transactional history of the seller.
According to Rep. Debra Hilstrom, the legislation’s author, “This is to make sure everyone knows and understands the consequences of these sales, and so a judge can really evaluate whether or not someone in a stressful situation knows what they’re getting into.”
A structured settlement pays out to the recipient a tax-free, guaranteed income stream in installments over the life of the settlement. Structured settlements were first used in Canada following a massive lawsuit over Thalidomide.
Structured settlement payments are a valuable asset that can be valued and sold in the secondary marketplace.
For individuals who need liquidity from their assets, selling could be a good solution. However, sometimes individuals are taken advantage of in the marketplace. That’s what the Minnesota law hopes to prevent. Currently Minnesota, like 47 other states, requires a judge’s approval before an annuitant can sell their payments. This new legislation now makes judges aware of prior transactions and applications of the annuitant; giving them the ability to make more informed decisions about whether a transaction is in the seller’s best interest.
The new legislation is modeled after similar laws in New York and California.
Source:
http://www.startribune.com/politics/statelocal/265053061.html#cEPckXpq2hJyDTsw.97
