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.
