In most cases, it is usually in recipients' best interest to NOT sell their structured revenue stream in lieu of a lump sum amount. Here are a few reasons why:

Long Term Security:The legislative intent behind Long-term Structured Settlements has been to provide long term fiscal security for the Injured party. The legistaltion has been crafted to provide several advantages for the injured parties. First, there is security. Designed to provide a steady income for the long term, a structured settlement guarantees long-term revenue stream for the victim and/or their families. It allows the victims and their families to focus on recovery, and coping strategies in stead of having to worry about investment and cash flow related matters.

Financial/Tax Benefits: The current federal tax laws require that all monies received in the form of structured settlements incur no tax liabilities for the recipient. It explicitly states that all (100 percent) of the structured settlement payment is to be completely exempt from federal and state income taxes.

Considering the above two major advantages, it is usually a good idea to refrain from selling off your structured (periodic) payments revenue stream.

Having said that, one must, of course, take into consideration the specifics of an individual's health and personal needs and desires and only then make an informed decision on whether or not it would be prudent to trade his/her structured payments for a one time payment of a lump sum amount. Therefore, considering the potential tax liabilities, and the long lasting effects that such a decision can have on a recipient's financial and personal well-being, such decisions must be made only after a careful and an informed analysis.

Visit Why and When to Sell Rights to an Existing Structured Settlement Arrangement? page for related discussion on when it would potentially make sense to consider selling off a structured payments annuity revenue stream.