When it comes to structured settlements and the decision of whether or not to sell payments, it’s a good idea for everyone involved to understand the difference between the “primary market” and the “secondary market.”
The Primary Structured Settlement Market
The primary structured settlement market is where structured settlements are initially negotiated and set up for annuitants. A structured settlement consultant works with the attorney and client to establish a settlement that takes into account the client’s projected future needs.
Primary structured settlements are carefully constructed to benefit the client and give the annuitant flexibility to receive future lump sum payments on a specific schedule, future monthly payments for a guaranteed and/or lifetime period or a combination. These primary market structures have other benefits as well:
- Primary structured settlements are tax free
- Primary structured settlements are creditor proof
If, for some reason, a structured settlement or other vehicle such as a trust is not set up initially, the client receives the settlement all at once along with the responsibility of properly investing it for their future. That can be a heavy burden because of the accompanying uncertainty and volatility.
The Secondary Structured Settlement Market
The secondary structured settlement market is comprised of companies that purchase structured settlements payments from annuitants. This market has a wide range of participants and it’s important to help clients find a quality company to work with.
The secondary market is governed by Internal Revenue Code Section 5891 together with individual state Structured Settlement Protection Acts. These laws work in concert to allow the sale and transfer of structured settlement payments with court approval. Annuitants can sell their payments if a judge finds that the sale is in their best interest.
The settlements put in place are fully intended to be long term, and, indeed, most annuitants don’t sell their payments. However, for the 5 to 10 percent of people whose financial needs have changed since their structure was put in place, being able to sell some or all of their payments is very helpful.
Strategic Capital –Leading the Structured Settlement Secondary Market
When an annuitant faces an unexpected financial change and turns to the structured settlement secondary market to sell their payments, they encounter a confusing and distracting array of advertisements and inducements all clamoring for their attention. That’s when they need help the most and we take the time to do just that.
Our client representatives are committed to serving their clients with the utmost professionalism and compassion. We really try to understand what the client needs, both now and later. We take as much time as necessary to thoroughly explain the consequences of selling payments and help clients make a better decision about which, if any, payments to sell.
In a market filled with hype and noise, we’re the quiet company that puts clients first.
Ric Perez is our Vice-President who oversees clients in the west and Strategic Capital is our Vice President who oversees clients in the east. Ric can be reached directly at email@example.com or
1-866-821-6108 and Cam can be reached directly at firstname.lastname@example.org or