Most “good” and “bad” reasons for individuals to sell structured settlement payment rights result from bad settlement planning. Bad settlement planning includes: “Over-structuring” without adequate liquidity or diversification
- Failure to plan for future contingencies and/or uncertainties
- Failure to justify that tax-exempt periodic payments are in the recipients’ “best interest” or at least meet a product suitability standard
- Significant mismatching of periodic payment amounts and payout patterns with anticipated needs
- Inappropriately locking minors into future periodic payments following their age of majority
- Failure of specific annuity-financed periodic payments to meet Medicaid qualification requirements.
- Other “bad” reasons could result from “buyers’ remorse” and/or poorly considered or self-serving post-settlement advice.
“Good” reasons to sell could result from dramatic, “unanticipated” changes in circumstances without better available financial alternatives. For example, financial deterioration of periodic payment obligors assuming willing structured settlement payment right purchasers exist.