by John Darer CLU ChFC CSSC RSP CLTC
A Firemen's Fund annuitant from New York, who sold 25 years of structured settlement payment rights to JG Wentworth in several deals between 1998 and 2002 regrets that decision. The monthly payments he sold represented his entire structured settlement. That was all he had. The annuitant contacted me today and questioned if the deals were legal because no judge ever approved the transaction.
Unfortunately the Victims of Terrorism Tax Relief Act of 2001, which gave birth to IRC 5891, did not go into effect until January 2002. Moreover the state implementation of structured settlement protection acts has been a gradual process. The state laws require judicial approval of structured settlement factoring transactions, also known as structured settlement transfers.
Such a call underscores the finality of a structured settlement factoring transactions. Notwithstanding the Brenston appellate decision vs Settlement Funding (Peachtree) in Illinois (if it stands), if you enter into a contracts in good faith, you can't undo the structured settlement sales many years down the road.