Selling an Annuity While Living Abroad

Contributed by, 05 May, 2015

Coming to terms with a personal financial crisis when you're living in a foreign place is overwhelming. Struggling with medical bills, car problems, rent or even buying a plane ticket to visit home can empty your wallet and leave you stranded.

The physical distance between you and your bank as well as the need to convert currency makes the situation extremely inconvenient.

In those moments, owning an annuity can be a life-saver. Turning to a cash reserve that you've left untouched until now allows you to get back in control.

Deciding to Sell Your Stream of Payments

For annuities and settlements issued outside the United States - purchased or awarded after you moved - consider selling to a company in the country that issued it.

If you received a settlement in the United States, then there is a strong chance you will be able to get annuity cash. Work with a U.S. company already familiar with the selling process rather than trying to convince a foreign company to buy your payments.

Once you've contacted a few buyers, request a quote for how much your payments are worth.  The quote will be based on the size and frequency of payments, current economic positions and how competitive the purchasing market is.

You may be able to choose what proportion of your annuity you want to sell.  You could transfer a chunk of payments, say five years' worth, and keep the rest for retirement. You could sell a percentage of every payment you're expecting. If you reserve some of the payments and decide you want this cash later on, you can pursue selling those payments then. Your final option would be selling the entire resource for one large lump sum.

Walking through the Selling Process

After choosing a company and agreeing upon a set amount of your annuity you want to sell, the buyer will send you the official documents for formalizing the sale.  From here, depending on the type of annuity you own, the buyer will work with you to get a court approval of the transfer.

The rules for selling structured settlement payments are more stringent than for annuities. With annuities, where you purchased the investment tool for retirement savings, getting cash is a much simpler task and will not involve the intervention of a court. It's a mere matter of paperwork and signatures.

Structured settlements are used to resolve lawsuits, such as personal injury cases or workers' compensation. A judge must approve of your reasons for getting cash from your payments. In the majority of states, you will need to appear in court to receive approval for transferring payments. Find out the laws in the state of residence where your annuity was issued to learn if you need to be present.

Getting Cash in Your Hands

Once your payment transfer is approved, you can work with your bank to exchange the money for foreign currency or move the money into a foreign bank you are working with.

Follow all tax regulations the year you sell annuity payments. If you don't pay taxes you owe on the income you gain, it may appear as though you are trying to evade these costs. Remember, even though you are living out of the country, if you are a U.S. citizen you must still file annual income taxes.

Armed with the cash that was previously locked away in your annuity or structured settlement, you will be able to tackle your financial crisis and move forward with your life.

Tags: Work | currency | retirement | investment | United States | regulation | court | law | tax |



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