Maryland Residents: You must have independent professional advice
Maryland Independent Professional Advice
If you are a Maryland resident and you are interested in selling your structured settlement payment rights, you must obtain independent professional advice. Below we cite how Maryland defines independent professional advice, and then we cite the code that REQUIRES you to have independent professional advice.
- 5-1101(c) Independent professional advice.–“Independent professional advice means advice of an attorney, certified public accountant, actuary, or other licensed professional adviser:
(1) Who is engaged by a payee to render advice concerning the legal, tax, and financial implications of a transfer structured settlement payment rights;
(2) Who is not affiliated with or compensated by the transferee of the transfer; and
(3) Whose compensation is not affected by whether a transfer occurs.
The Maryland code that REQUIRES you to have independent professional advice is:
- 5-1102(b)(3) The payee received independent professional advice regarding the legal, tax, and financial implications of the transfer.
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Before 2002, only the first issue of a structured settlement was recognized and defined by the IRS and Congress. The aftermarket (where someone wants to sell their future payment rights for a lump sum of money) for these structured settlements existed, but not with protection from our government.
Not only were consumers getting ripped off, but companies trying to buy these annuities were getting ripped off and investors in these companies were getting ripped off. Now, since 2002, the Structured Settlement Industry has expanded to include the aftermarket for structured settlements (factoring transactions) as well as structured settlements. ”Structured Settlement” and “Structured Settlement Factoring Transaction” are now both defined in the Internal Revenue Code.
There are more structured settlement product opportunities since 2002. In the past, the traditional structured settlement industry was slow to respond with product improvements and education. They were slow to meet the needs of the customer trying to sell: greater flexibility to meet unanticipated future costs.
Now, the Industry can receive a tax break to design a sale of improved structured settlement products. There is mandated education for people of companies that are trying to sell a product (the structured settlement rights) whose payment rights are assignable under federal and state law. And, areas that historically were most used to rip off a consumer, now require close attention by the Courts.
So, any pending litigation will need to be reconsidered. A company wishing to buy structured settlement payment rights will have to do it in another way.
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