We all look for ways to increase our financial security. As an attorney, perhaps you have encouraged your clients to explore the possibility of a structured settlement, because you know that structured settlements provide guaranteed, consistent, and tax-free payments.
Similarly, you as a lawyer have the ability to maximize your own wealth through the use of tax deferrals. Any pretax earnings are a valuable piece of your overall financial strategy.
A structured attorney fee includes the ability to:
- Defer income to yield a lower tax bracket
- Reduce tax obligations over time with set income distributions
- Provide a contractual guarantee that eliminates the risk of loss of principal, pursuant to the claims-paying ability of the issuing insurer
- Earn tax-deferred growth
- Plan for future financial goals (e.g. retirement, college) by arranging specific lump sum payments in key years
- Level cash flow for you or your law firm, making your income level more predictable
Underwriting companies offer diverse and flexible plans, so if you are in a partnership, know that it’s not all or none. Individuals, partners, or firms can leverage a structured attorney fee in lieu of traditional distributions. Each plan takes into account how your professional corporation or partnership arrives at those decisions.
If you’re considering utilizing this wealth planning option, you must elect to structure fees prior to the end of the settlement. The contingent fee arrangement should specify that a structured fee can be elected at the conclusion of the case. An amendment can be made to the fee agreement to add such a provision, but must be made prior to the settlement.
Before your case settles, think about contacting an experienced settlement planner who can help prepare the necessary paperwork and help guide you through the process of structuring your fees.
A West Point graduate where he served as captain and military aviator, John Bair continues his commitment to our country through his efforts within the settlement planning industry. He has represented families of victims lost in the Flight 3407 crash, offered pro bono services to the families of 9/11 victims and drafted the first consumer protection bill for plaintiffs (H.R. 3699).