What is an Attorney Fee Structured Settlement
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 their fee, the income & taxes on the Structured Settlement payments are deferred and paid only when the Structured Settlement payments are received.
Benefits of an Attorney Fee Structured Settlement
- 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 they receive the future payments prior to the finalization of the settlement documents and distribution of the settlement proceeds. An attorney can structure their fee regardless of whether or not the plaintiff chooses to structure their settlement.
Services We Offer
- Attendance at Mediation
- Personal Consultations
- Medicare/Medicaid/Special Needs
- 50(a) & 50(b) Periodic Judgement Analysis
- Impaired Ratings
- Life Care Plan Analysis
Attendance at Mediation allows our consultants to design future periodic payment streams on-site and convert a lump sum offer into meaningful monthly income streams the injured party can understand and appreciate. It provides the consultant an opportunity to learn about the individual needs and future plans of every injury victim and their family.