A Capehart Scatchard Blog

Court May Approve Sale of a Structured Settlement if in the Best Interest of the Payee

By on December 4, 2015 in Blog with 0 Comments

The court in In re T. Keena, Transfer of Structured Settlement Proceeds, 2015 N.J. Super. LEXIS 163 (Law Div. June 18, 2015), was asked to approve the sale of a structured settlement to Peachtree Settlement Funding. The transaction provided for a sale of a future payment in the amount of $66,175 on June 19, 2109 for the current sum of $46,250.

Under the Structured Settlement Act, N.J.S.A. 2A16-63, judicial approval of the sale must be obtained. There must be a finding that the sale is in the payee’s best interest, taking into account the welfare and support of the payee’s dependents.

However, the term “best interest” is not defined by the Legislature and there is only one law division case on point.

The court noted that the reason for the structured settlement must not be lost; it’s to create a degree of financial security for the injured person. The settlement is typically structured in a good faith effort to save people from themselves, by insulating injured persons from the temptation to possibly squander their settlements. The court noted that it had approved previously such sales to address an urgent need such as education expenses, purchase of a home , payment of debts that threaten continued occupancy of the payee’s dwelling, payment of debts/fines that prevent a payee from being employable, payment of nonroutine medical expenses, purchase of a vehicle critical to the payee’s ability to earn income, retention of professional services needed to prevent a known harm, wedding costs, adoptions costs, and funeral expenses.

The court pointed out that its obligation was much more than merely inquiring into whether the payee is competent and has voluntarily entered in the agreement. The court must make express findings that the proposed sale is in the payee’s best interest by something improving his or her life, addressing an urgent need, making the loss of future income and the receipt of a lesser sum now akin to an investment in the future which will enhance that person’s life in a meaningful way.

Here the court did conclude that Keena’s decision to sell a future payment was in the best interest of both her and her family. Keena was looking to use the money to move to a new home after their home had been damaged by Superstorm Sandy. They had repaired the home but wanted to move to a mainland community. Also, additional future payments remained available to Keena which she intended to use for her children’s education. Thus, the sale was approved.


About the Author

About the Author:

Ms. Ramos is an Executive Committee Member and Co-Chair of the Litigation Department at Capehart Scatchard, P.A. located in Mount Laurel, New Jersey. She is an experienced litigator with over 30 years experience handling diverse matters. Practice areas include tort defense, business litigation, estate litigation, tort claims and civil rights defense, construction litigation, insurance coverage, employment litigation, shareholder disputes, and general litigation.

For the years 2020 and 2021, Ms. Ramos was selected for inclusion in The Best Lawyers in America© in the practice area of Litigation - Insurance. The attorneys on this list are selected based upon the consensus opinion of leading lawyers about the professional abilities of their colleagues within the same geographical area and legal practice area. A complete description of The Best Lawyers in America© methodology can be viewed via their website at: https://www.bestlawyers.com/methodology.

In 2021, Capehart Scatchard and Ms. Ramos received the “Best Law Firm” ranking in the area of Litigation – Insurance (Metro, Tier 3) published by U.S. News & World Report and Best Lawyers®. Law firms included on the list are recognized for professional excellence with consistently impressive ratings from clients and peers. To be eligible for a ranking, a firm must have at least one attorney who has been included in the current edition of Best Lawyers in America, which recognizes the top five percent of practicing lawyers in the United States. Betsy Ramos (Litigation – Insurance) was recognized for this prestigious award in the 2021 edition. For a description of the “Best Law Firm” selection methodology please visit: https://bestlawfirms.usnews.com/methodology.aspx.

“Best Law Firms” is published by Best Lawyers in partnership with U.S. News & World Report. For a description of the selection methodology please visit: https://bestlawfirms.usnews.com/methodology.aspx.

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