Structured Attorney Fees

If anyone understands the effect of taxes on income, a plaintiff attorney does. How many times have you been rewarded a large fee, only to see a substantial portion lost to taxes? Now there is a solution for plaintiff attorneys. The decision in Childs v. Commissioner affirmed that plaintiff attorneys can receive fees as future periodic payments. By structuring your attorney fees, you can enjoy the low risk and competitive rate of return offered by structured settlements. Instead of being taxed on a large lump sum, your fees are taxed as you receive them. The benefits of structuring your fees are many. Consider just some of them:

COLLEGE PLANNING. Structuring your attorney fees is an excellent way to establish a college fund for your children. The flexibility inherent in structured settlements allows you to receive payments when you will need them the most. Unlike most institutionalized or state sponsored college plans, structures have no restrictions on how the money is spent, how much money can be set aside or on the school your son or daughter chooses.

OVERHEAD EXPENSES. As a plaintiff lawyer your annual income is dependent on numerous factors. Some years may be better than others. With that in mind, structuring your attorney fees can provide you with a dependable, fixed future income. Being able to secure a predictable income can take care of routine expenses such as office overhead or funding for lengthy cases. Best of all, it provides peace of mind that a steady flow of cash will be available - regardless of market conditions.

RETIREMENT PLANNING. Chances are you already have a retirement plan in place. Are you confident that your current plan will be able to satisfy all your retirement aspirations? Structuring your attorney fees to create a supplemental retirement plan can provide you with an additional layer of security. Unlike individual retirement or an employer's 401 (k) plan, a structured attorney fees plan is safeguarded from market volatility.  Moreover, there are no restrictions on when you can begin receiving your money. If you have been dreaming of an early retirement, structuring your attorney fees may be a solution.

*DOLLAR COST AVERAGING. A structured attorney fee plan can be a great tool for funding an equity account. Structuring your fees to pay into a brokerage account on a regular basis can allow you to invest in a consistent and disciplined manner. This concept, typically called dollar cost averaging, can help you avoid the adverse effects of market volatility. If the market increases steadily, it will allow you to invest at a lower cost per share than the average price per share. Since your monthly investment stays constant, you purchase more shares at lower prices and fewer shares at higher prices.

Please note: The ability to defer taxation on structured attorney fees may be challenged by the IRS.  Each attorney is responsible for his/her own tax returns.

*Dollar cost averaging does not guarantee a profit nor does it fit every person's financial situation