§ 15-50-40 — Direct or indirect transfer of payment rights; approval by final court order.

(A) 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 advance in a final court order based on express findings by the court that the: (1) transfer is in the best interest of the payee; (2) payee has been advised in writing by the transferee to seek independent professional advice regarding the legal, tax, and financial implications of the transfer and has knowingly and in writing waived receipt of that advice; and (3) transfer does not contravene an applicable statute or the order of any court or other government authority. (B) In determining whether a proposed transfer is in the best interest of the payee pursuant to subsection (A)(1), the courts must take into consideration the welfare and support of the payee and the payee's dependents, if any. The court must also consider: (1) the reasonable preference of the payee, in light of the payee's age, mental capacity, maturity level, understanding of the terms of the agreement, and stated purpose for the transfer; (2) if the periodic payments were intended to cover future income or losses or future medical expenses, whether the payee has means of support aside from the structured settlement to meet these obligations; (3) whether the payee can meet the financial needs of, and obligations to, the payee's dependents if the transfer is allowed to proceed, including child support and spousal maintenance; (4) whether the payee completed previous transactions involving the payee's structured settlement payment rights, and the timing, amount, stated purpose, and actual use of the proceeds; (5) the impact of the proposed transfer on current or future eligibility of the payee or the payee's dependents for public benefits; and (6) any other factors or facts the court determines to be relevant. (C) No direct or indirect transfer of a payee's structured settlement payment rights by a payee's conservator, if a conservator has been appointed, shall be effective and no structured settlement obligor or annuity issuer shall be required to make a payment directly or indirectly to a transferee or assignee of structured settlement payment rights unless, in addition to the findings required under this section, the court also finds that the proceeds of the proposed transfer would be applied solely for the benefit of the payee. (D) No direct or indirect transfer of a minor's structured settlement payment rights by a parent, conservator, or guardian shall be effective and no structured settlement obligor or annuity issuer shall be required to make a payment directly or indirectly to a transferee or assignee of structured settlement payment rights unless, in addition to the findings required under this section, the court also finds that: (1) the proceeds of the proposed transfer would be applied solely for support, care, education, health, and welfare of the minor payee; and (2) any excess proceeds would be preserved for the future support, care, education, health, and welfare of the minor payee and transferred to the minor payee upon emancipation. (E) The final court order must expressly state that the best interest factors enumerated in subsection (B) have been considered, and if the court approves the transfer of payment rights, the order must state that the court finds that it is in the best interest of the payee to approve the transfer.

Legislative History

HISTORY: 2002 Act No. 252, SECTION 1; 2023 Act No. 22 (S.259), SECTION 4, eff July 1, 2023. Editor's Note 2023 Act No. 22, SECTION 20, provides as follows: "SECTION 20. SECTION 9 through SECTION 16 take effect on January 1, 2024. All other SECTIONS take effect on July 1, 2023, and apply to applications filed on or after the effective date." Effect of Amendment 2023 Act No. 22, SECTION 4, inserted the (A) designator, and in (1), substituted "interest of the payee" for "interests of the payee, taking into account the welfare and support of the payee's dependents", and in (2), substituted "legal, tax, and financial implications of the transfer and has knowingly and in writing" for "transfer or knowingly and in writing has"; and added (B) to (E).