Selling a Structured Settlement in California: Court Rules Under Insurance Code §§10134–10139.5

Med F.

Settlement Analyst

Updated November 6, 2026 9 min read

This page covers only what is specific to California. If you are still deciding whether selling makes sense at all, start with our general guide, should I sell my structured settlement?, which explains how much cash a sale typically produces and when keeping the payments is the better choice.

Which law governs a California structured settlement sale?

California Insurance Code sections 10134 to 10139.5 govern every transfer of structured settlement payment rights by a California payee. The core rule is in §10137: a transfer “is void unless a court reviews and approves the transfer” and finds that it is fair and reasonable and in the payee’s best interest, taking into account the welfare and support of his or her dependents, and that it complies with the article and other applicable law.

In practice that means no buyer can pay you for future payments on a handshake or a signed contract alone. The money moves only after a superior court judge signs an order approving the specific deal.

What must the buyer disclose, and when?

Under §10136(b), the buyer must give you a separate written disclosure statement ten or more days before you sign the transfer agreement. The disclosure and the agreement must be printed in at least 12-point type. The statute’s form disclosure includes:

The transfer agreement itself (§10136(c)) must repeat the key numbers, including the net amount payable to you, the percentage that net amount represents of the discounted present value, and a statement in capital letters of the equivalent interest rate you will be paying. It must also advise you to get independent tax advice. To compare two California offers on the same basis, put their net amounts into our structured settlement calculator.

Can you cancel after signing?

Yes, until the final court order. Section 10136(e) provides that at any time before the court enters a final order approving the transfer, the payee may cancel the transfer agreement “without cost or further obligation” by giving the buyer written notice of cancellation. A phone call is not enough; send the notice in writing and keep a copy. If the court has already approved the sale, the situation is different; see can you reverse a structured settlement sale?

Where is the petition filed and who gets notice?

Under §10139.5(f)(1), the petition is brought in the superior court of the county where you live when you sign the transfer agreement. If you are not domiciled in California, it can be brought in the county where you live or where the obligor or annuity issuer is domiciled.

• Notice: at least 20 days before the hearing, the buyer must file and serve notice on all interested parties (§10139.5(f)(2)), who may respond in writing or take part in the hearing.
• Petition contents: to the extent known, your name, address, age, marital status, dependents, income, support obligations and any prior transfers (§10139.5(c)).
• Costs: all court costs and filing fees are paid by the buyer (§10139.5(g)). The statute also caps fees for independent professional advice at $1,500 (§10139.5(h)).

What must the judge find?

The court must approve the transfer in a final order based on express written findings (§10139.5(a)) that:

1. the transfer is in your best interest, taking into account the welfare and support of your dependents;
2. the buyer advised you in writing to seek independent professional advice, and you either received it or knowingly waived it in writing;
3. the notice and disclosure rules were followed and the agreement complies with §§10136 and 10138;
4. the transfer does not contravene any applicable statute or court order;
5. you understand the terms of the transfer agreement; and
6. you understand, and do not wish to exercise, your right to cancel.

In deciding best interest, §10139.5(b) tells the court to weigh the totality of the circumstances. The listed factors include your age, mental capacity and legal knowledge; your financial situation; whether the payments were meant to cover medical care or living expenses and whether you still need them for that; other income and child support obligations; whether the discount rate and costs are fair and reasonable; prior transfers within five years; any hardship; and whether you received independent legal or financial advice. If you do not fully understand the deal, the court may deny or defer ruling.

Why do California petitions get denied?

Missing evidence is a common reason. In a tentative ruling for a May 2, 2025 hearing (Santa Barbara Superior Court, case 25CV01005), the court denied a petition without prejudice because “there is no declaration from the payee addressing any of the circumstances the court must consider” and the petition did not provide all of the information required by §10139.5(c) (ruling). A denial without prejudice means the petition can be refiled with the missing facts, but it costs time.

California seller checklist

• Get the written disclosure and count at least 10 days before you sign anything.
• Compare the net amount, not the headline price, across two or three written quotes.
• Talk to an independent attorney or financial adviser who is not paid by the buyer; the court will ask whether you did.
• Prepare to explain your reason for selling, your dependents and your other income in a declaration.
• If you change your mind before the final order, cancel in writing.

For buyer comparisons, see our structured settlement company comparison. Selling in another state? Florida’s rules are different; see selling a structured settlement in Florida, or browse all state guides.

Frequently asked questions