There are actually only 10 states that require an IPA, or independent professional advisor; in a structured settlement transfer or lottery payment transfer. We have touched on those states in other blogs,and continue more in-depth articles on those states as we go. Then there are the other states like California, where you must be advised of your right to have an IPA. Then there are a handful of states where you have the right but there is no other mention of it than that.
It is a standard practice by most factoring companies, buyers of structured settlement payments, to only get an IPA involved when required by the court after the fact to save the deal. Here we could take each state one by one and go through the changes taking place in the courts, but that will be covered in other blogs later on.
What i want to look at today is an overview of all the states and a growing trend with the courts funding being lowered, and the lack of man power. The courts in all these transfer cases, are to act as the consumer protector, and guardian. Now that is getting increasingly difficult as they are being forced to cut down on court clerks and research assistants, they no longer have the personal to review each case thoroughly. With that burden landing directly in the judges laps, causing more and more judges to be reluctant to approve such cases. What we have been seeing is the judges utilizing the IPA, as a means to relieve the burden of due diligence and passing it on to the parties involved.
Some states say the purchaser must pay and some states make the seller pay for the IPA, but the results are the same, the initial court case gets delayed in order to give the seller time to find an IPA. This is where it starts to get costly for both the buyer and the seller, both are counting on these transfers to go through as quick as possible. So when the court grants a continuance in order to get independent professional advice, it costs time, and money that could have been avoided. It is similar to that old saying that talks about pinching pennies costing dollars.
See this is where the conflict arises. Do you invest in an IPA from the start or do you take the gamble the judge won't require one? Now no one can say for sure that the judge won't require one and no one can say for sure the judge will require one. That would require a fortune teller or a mind reading.
what i can tell you is Andres Financial Group does it's best to preserve the court date and make the transaction go as planned, and adheres to the state statue. Also a good IPA would maintain a database of judges and courts tracking preferred terms. Yes we do that, we have nothing better to do apparently, hahahaha.
Andres Financial Group
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