Michigan Laws 691.1304 – Transfer of structured settlement payment rights; final court order; approval; basis; findings
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Terms Used In Michigan Laws 691.1304
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Discounted present value: means the present value of future payments determined by discounting the payments to the present using the most recently published applicable federal rate for determining the present value of an annuity, as issued by the internal revenue service. See Michigan Laws 691.1302
- Gross advance amount: means the sum payable to the payee or for the payee's account as consideration for a transfer of structured settlement payment rights before reduction in that sum for transfer expenses or other deductions. See Michigan Laws 691.1302
- Imminent financial hardship: means the inability of the payee, because of a change in the payee's circumstances after the execution of the initial structured settlement agreement, to purchase or pay for 1 or more of the following without the transfer:
(i) Medical care or a medical device for the payee or the payee's dependents. See Michigan Laws 691.1302in writing: shall be construed to include printing, engraving, and lithographing; except that if the written signature of a person is required by law, the signature shall be the proper handwriting of the person or, if the person is unable to write, the person's proper mark, which may be, unless otherwise expressly prohibited by law, a clear and classifiable fingerprint of the person made with ink or another substance. See Michigan Laws 8.3q Independent professional advice: means advice of an attorney, certified public accountant, actuary, or other licensed professional adviser. See Michigan Laws 691.1302 Payee: means an individual who receives tax free payments under a structured settlement and who proposes to make a transfer of payment rights under the structured settlement. See Michigan Laws 691.1302 Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims. Statute: A law passed by a legislature. Structured settlement: means an arrangement for periodic payment of damages for personal injuries or sickness established by settlement or judgment to resolve a tort claim. See Michigan Laws 691.1302 Structured settlement agreement: means an agreement, judgment, stipulation, or release embodying the terms of a structured settlement. See Michigan Laws 691.1302 Structured settlement obligor: means , with respect to a structured settlement, a person that has a continuing obligation to make periodic payments to a payee under the structured settlement agreement or a qualified assignment agreement. See Michigan Laws 691.1302 Structured settlement payment rights: means rights to receive periodic payments under a structured settlement, whether from the structured settlement obligor or the annuity issuer, if 1 or more of the following conditions exist:
(i) The payee is domiciled in, or the domicile or principal place of business of the structured settlement obligor or the annuity issuer is located in, this state. See Michigan Laws 691.1302Transfer: means a sale, assignment, pledge, hypothecation, or other alienation or encumbrance of structured settlement payment rights a payee makes for consideration; except that "transfer" does not include the creation or perfection of a security interest in structured settlement payment rights under a blanket security agreement entered into with an insured depository institution, unless action has been taken to redirect the structured settlement payments to the insured depository institution or to an agent or successor in interest of the depository institution, or action has been taken to otherwise enforce the blanket security interest against the structured settlement payment rights. See Michigan Laws 691.1302 Transferee: means a person acquiring or proposing to acquire structured settlement payment rights through a transfer. See Michigan Laws 691.1302
A direct or indirect transfer of structured settlement payment rights is not effective and a structured settlement obligor or annuity issuer is not required to make a payment directly or indirectly to a transferee of structured settlement payment rights unless the transfer has been approved in a final court order and the order is based on express findings of all of the following:
(a) The transfer is in the best interest of the payee, taking into account the welfare and support of the payee’s dependents.
(b) The transferee has advised the payee, in writing, to seek independent professional advice regarding the transfer, and the payee has either received independent professional advice or knowingly waived in writing the opportunity to seek advice.
(c) The transfer does not contravene an applicable statute or order of the court or other government authority.
(d) The discount rate or rates used in determining the discounted present value of the structured settlement payments to be transferred do not exceed 25% per year.
(e) If the transfer is inconsistent with a restriction against assignment in the structured settlement agreement and if the structured settlement obligor objects to the transfer based on the restriction against assignment before the hearing on the application for approval of the transfer, all of the following:
(i) The payee will suffer imminent financial hardship if the transfer is not approved.
(ii) The transfer will not render the payee unable to pay current or future normal living expenses.
(iii) The transfer order will restrict payment of the gross advance amount to direct payment to the provider of the goods or services that are the subject of the imminent financial hardship. If the total cost of the goods or services cannot be readily determined at the time of or within a reasonable time after the transfer, the court may exercise reasonable discretion in ordering such direct payments.