A new batch of laws went into effect on August 1, and one of them increases protections for individuals who may be looking to trade their structured settlement for a lump sum amount.
You may have heard commercials on television from companies that offer to pay you a lump sum in exchange for the rights to your structured settlement. It may seem like a great way to receive your money up front, but oftentimes these companies charge a significant premium in exchange for a lump sum payment. Sometimes the practices border on the predatory, which is why Minnesota legislators decided to add additional protections for injured individuals.
According to the new law that went into effect on the first of the month, any person attempting to transfer their structured settlement to another party in exchange for a lump sum payment will be required to have the transfer details reviewed by an attorney. Moreover, the transfer will also need to be reviewed by a judge to ensure the transfer is in the payee’s best interest. If either the lawyer or the judge have cause for concern, the transfer can be nullified.
Protecting Injured Parties
The bill was sponsored by Rep. Eric Koegel (DFL-Spring Lake Park) and Sen. Paul Utke (R-Park Rapids). It states that a lawyer assigned by a judge as an “evaluator” must “make an independent assessment and advise the court whether the proposed transfer is in the best interest of the payee, taking into consideration the payee’s dependents, if any.”
If you’re worried that this process will eat up a portion of your settlement, lawmakers considered that as well. The cost of this third-party evaluation will need to be paid for by the company proposing the settlement transfer. Additionally, the settlement purchaser must provide a statement that clearly lays out the financial ramifications of the proposed transfer, including the equivalent annual interest rate the payee would be effectively paying by accepting the deal.
Structured settlements are designed to provide financial assistance now and in the future as you continue to deal with the fallout of a personal or work injury. By accepting a lump sum, it’s harder for you to account for your future financial needs, especially if you take a much smaller lump sum than you would receive in the long term by maintaining the structured settlement. These lump sum payment companies wouldn’t be offering these deals if they weren’t very lucrative to them, so be wary of selling them your settlement for a fraction of what it’s worth because you believe you need a lump sum of money now. It seems like a wise move to add additional protections that will prevent predatory practices, especially since the buyer of the settlement will need to front the costs to ensure the deal is fair and in the injured party’s best interests.
If you’ve been injured in a personal injury or workers’ compensation incident and are hoping to earn a settlement, or you have questions about turning your structured settlement into a lump sum award, please don’t hesitate to reach out to the team at Hey Workers. We have your best interests at heart, because we earn more when we get you the biggest award possible. Our interests are aligned and we’ll make sure that you aren’t taken advantage of by others in the industry. To trust your case or your settlement to someone who wants to get you the most money possible, give our team a call today at (844) 439-9675.
