Is the Purchase of Structured Settlement Payments Legal in Your State?
The federal structured settlement law as laid out in IRC 5891 makes the purchase of structure settlement payments legal and thus gives all U.S. citizens the right to sell their structured settlement payments, provided that the court approves such a sale. However, if you sell a structured settlement payment without receiving judicial approval the buyer can be subject to a 40% tax penalty on the payments that you sold. Thus, it pays, literally, to do things legally. Read on for more details about these laws.