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Independent Professional Advice
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Independent Professional Advice for Structured Settlement Factoring Transactions

A few state structured settlement protection statutes throughout the United States require an annuitant to receive independent professional advice before selling the rights to their future structured settlement payments. Independent professional advice is required in some states to make sure that the annuitant (seller) receives a fair market value from the factoring company (buyer) and that the transaction is in the best interest of the selling party.

Receiving independent professional advice is usually in the best interest of the seller and is recommended for all individuals selling the rights to their payments. Making a decision to sell payment rights should be arrived at after a careful thought and examination. Acting without such advice may neither be in your best interest nor that of any potential buyer and could lead to your application not receiving the required judicial approval.

Independent professional advice can be provided by an attorney, accountant, financial planner or someone otherwise qualified to provide such advice.

What States require Independent Professional Advice?

  • Alaska
  • Delaware
  • Louisiana
  • Maine
  • Maryland
  • Minnesota
  • Missouri
  • North Carolina
  • Ohio

Some settlement purchasers or factoring companies actually encourage structured settlement annuitants to seek independent professional advice even if not required by law, particularly in states like New York. From time to time we receive calls from new individuals who regretted having sold their structured settlement payment rights, or didn't shop around for the best deal when they did. The small cost of an IPA can provide additional piece of mind.

If you need independent professional advice concerning structured settlements please consider 4structures.com, LLC's John Darer . Note that service is only provided where Mr. Darer is insurance licensed.

We also provide a structured settlement factoring discount rate calculator on our blog. The structured settlement factoring discount rate calculator is a helpful tool to figure out the effective discount rate that the factoring company is charging you (or your client). You can then use the number to compare to other sources of capital such as bank borrowing, credit cards, home equity loan, SBA loan etc.

What is the cost of an IPA?

An IPA typically costs $500. In the state of California, if the annuitant would like to obtain an IPA, then the factoring company has the obligation to reimburse the seller up to $1,500.

Shouldn't the company or individual that is buying my structured settlement payment rights pay for this?

An IPA is intended to be "Independent" professional advice. If the factoring company (buyer) was to pay for this service, then the professional advice would not be independent. There are certain cases that payment arrangements can be made to help out the annuitant (seller), so the transaction can be completed.


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