Structured Settlements that need extra special care
Workers compensation payments and minor or child structured settlement payments are hard and sometimes impossible to transfer to a purchaser.
Workers compensation settlements
The laws regarding workers compensation settlements are very different from state to state. Not only are the worker’s compensation laws different, but the laws that rule whether one can sell or not sell are very different from state to state. For this reason, it is not possible to develop a “standard” model for the sale of annuity payments that were acquired as a result of workers comp settlements because these payments are governed not only by the structured settlement protection statutes, but also by state specific workers comp statutes that are in effect. So, even though a particular state may allow for the sales of one’s structured settlement payments, the same state may not allow for this type of sale if it is the result of a worker’s comp settlement. That being said, each workers comp settlement must be evaluated on a case-by-case basis, before determining if a purchase is possible.
For example, in Ohio, the structured settlement protection act includes worker’s comp payments as being assignable, but the worker’s comp laws in Ohio specifically prohibit these payments from being assigned. On the other hand, in Ohio, worker’s comp payments are able to be sold for a lump sum because both the worker’s comp laws and the structured settlement protection act indicate that the payments are assignable.
Minor or children’s cases
Often, a minor (anyone under the age of 18) will have been awarded structured settlement payments to compensate the child for the loss of a parent, or for an injury or other damage that the child had to endure.
Sometimes, these annuitants consider selling their payments after they have reached the age of majority, which is most often the age of 18. In these cases, the person is assumed under the law to be able to make his or her own decision, and the court regards the sellers as it would any other adult.
Strategic Capital has helped many clients who were awarded the payments when they were children and then decided to or needed to sell some of their structured payments as adults.
In a number of other cases, we have been approached to buy structured settlement payments from an annuitant who is not yet 18, and therefore still a child. We proceed very carefully and methodically in these cases. Usually, the parent or other guardian of the child is initiating the sale of the payments. And 90% of the time, the parent or guardian wants to sell the payments for the benefit of the child, to give the child a better education, to deal with an unexpected medical expense of the child or, in one case, to send the teenage child to a special rehab program for drug abusers.
It is very important for us and the court to understand exactly why the sale is taking place. The court especially will want to know that the lump sum will be used for the child’s benefit and that the parent or guardian is not selling the payments for their own benefit so that the child will no longer have the promised payments when they reach adulthood. Occasionally a special guardian, a guardian will be appointed by the court to have a second opinion of the reason for the sale of payments. Sometimes the guardian will agree with the sale and sometimes will disagree. We do not deal with parents or guardians on behalf the children unless we feel that the reason for the sale is for the benefit of the child, and, as always, we try to structure the transaction so as to minimize the impact on the original structured settlement.
If you have a Minor OR child’s structured settlement case or a worker’s compensation structured settlement, please Call to discuss the details with a Strategic Capital Expert. Call us at