Attorney Fee Structured Settlements
Simple, Straight Forward and Financially Sound
Plaintiff attorneys with a contingency fee agreement have a one-time opportunity at settlement to defer income taxes on their fee using an Attorney Fee Structured Settlement.
The 11th Circuit U.S. Court of Appeal affirmed that attorneys who defer the payment of their fees pursuant to a Structured Settlement are not required to include that amount in their taxable income until the year that the fees are received under the terms of the structure (Richard A. Childs, et al vs. Commissioner of Internal Revenue 103 T.C. No. 36 Docket No. 15639-92).
As a result, if an attorney structures all or part of his/her fee, then the income taxes on the Structured Settlement payments are deferred and paid only when the Structured Settlement payments are received.
- Structured Settlements
- Attorney Fee Structured Settlements
- Non Qualified Structured Settlements
- Reinsurance Agreements
- Treasury Funded Structured Settlements™
- Single Premium Income Annuities
- Life Markets
NOT ALL PROCEEDS FROM A SETTLEMENT ARE PLACED INTO A STRUCTURED SETTLEMENT. A PORTION OF THE PROCEEDS MUST BE ALLOCATED FOR ATTORNEY FEES, REIMBURSEMENT OF LIENS AND IMMEDIATE CASH NEEDS
Tax deferral of your fee in both personal injury and workers compensation claims have many benefits including:
- A customized flow of income for your practice
- The creation of additional retirement income
- Meeting future financial needs of your family
- No 10% tax penalty for annuity payments before the age of 59 ½
- Eliminating the need to regularly monitor and reinvest your income
- Financial security with income over a period of years
- Added return on investment with compounding on a pre-tax basis
- Reduced estimated taxes in the year following settlement
- A 1099 filed in the year payments are actually received
As with a plaintiff’s Structured Settlement, the Attorney must determine how he/she wants to receive the future payments prior to the finalization of the settlement documents and distribution of the settlement proceeds. In most cases, the attorney can structure his/her fee regardless of whether or not the plaintiff chooses to structure a part of their settlement. The Attorney Fee structure will be funded through an annuity issued by a highly rated life insurance company.