Is Structured Settlement Periodic Payment a Liquid Asset?
First, let us define what a liquid asset is. Liquid asset is cash. Some also consider any possession that is easily convertible to cash easily a liquid asset. If you have a home in a prime spot and in good condition, that may be considered liquid asset. A good gauge for many financial advisors is if an asset may be sold or converted to cash within 20 days, that may be considered liquid. A farm, for example, or a resort is not usually considered a liquid asset because the sheer price that it will take to sell it will most likely, require more than twenty days for it to be converted to cash.
Essentially, no one gets by without a liquid asset. This is what you use in your daily transaction like buying basic goods. It is also important to determine how liquid you are when you are finalizing your last will.
Now, many are asking if the periodic payments you get from structured settlement may be considered a liquid asset. The periodic payment you get is a liquid asset. The total value of your structured settlement is not. Remember that for it to be liquid, you need court approval and the process takes more than one month. Financial advisors consider an asset to be liquid if it can be converted into cash for 20 days.
If you are looking into liquidating your structured settlement for inheritance purposes, you might not even have to. Remember that you can include in your settlement a clause that will allow your beneficiaries to continue getting the payment even when you pass away.
If you want to use you structured settlement to pay off debts, then you may really have to seek court permission to do so. Just be aware that when you sell your structured settlement future payments, you will get less than the real total value to pay the lawyers and other fees. Also understand that this is a business venture to structured settlement buyers and they need to make money off what they buy. Click here and here to read more about the things you need to be careful of when selling your structured settlement.
Related posts:
- Is Structured Settlement Considered a Personal Asset?
- Structured Settlement Payment Rights
- Why Not a Lump Sum Payment as a Settlement?
- Comparing Structured Settlements with Other Forms of Investments
- How to Ensure the Court that the Future of Minors will not be Compromised in the Sale of a Structured Settlement
