Court Approval for Structured Settlement Transfers
Sarah Chen
CFP®
Updated May 2, 2026 • 20 min read
Key Takeaway
Every structured settlement sale requires court approval. Judges evaluate whether the sale is in your best interest, the discount rate is reasonable, and you have a clear plan for the funds.
Why Court Approval Is Required
Every state has enacted a version of the Structured Settlement Protection Act, which mandates judicial review. The judge must find that the transfer is in your best interest and does not violate applicable law.
This protects sellers from predatory buyers and impulsive decisions that could harm their financial wellbeing.
What Judges Evaluate
Judges typically consider: your stated reason for selling, whether you have other financial resources, whether dependents rely on the payments, the discount rate applied, whether you received independent professional advice, and whether the buyer has a history of fair dealing.
Judges are more likely to approve sales for productive purposes like debt elimination, home purchase, or education.
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