Structured Attorney Fees
Structured fees allow attorneys to receive payments over time on a tax-deferred basis (see Childs v. Commissioner, 103 T.C. 634). Much like structuring a claimant’s settlement, structured attorney fees can be customized to meet the needs of the attorney. Payments can be made monthly, quarterly, annually, or in deferred lump sums. Rather than facing the burden of paying tax on the entire fee amount, structured fees are only taxable in the year(s) during which the payments are received. The Settlement Alliance team will help the attorney determine the best possible strategy for meeting financial goals through a structured fee arrangement.
Overhead Expenses: A plaintiff attorney’s income can vary, and structured fees can provide a dependable source of income for their firm. This allows for a predictable cash flow to cover routine expenses such as office overhead or funding for future cases.
Retirement Planning: Unlike traditional company-sponsored retirement plans, there are no limits on contribution amounts or required minimum distributions. This allows attorneys to customize a retirement plan that fits their individual needs.
College Planning: The flexible design of structured fees provides an excellent planning tool for future expenses. Unlike institutionalized or state-sponsored college plans, structures have no restrictions on how the money is spent.
- Potentially avoid massive federal and state income tax liability on large cases
- Possible reduction of federal income tax bracket or marginal tax rate
- Guaranteed rate of return
- Wealth preservation
- Stabilized future income for attorney and/or firm
- Low-risk foundation for diversified investment portfolio
- Tax-deferral benefits similar to traditional qualified retirement programs and IRAs without contribution limits
Ready to get assistance from our settlement planning professionals?
Call The Settlement Alliance today at (855) 284-3876.