Structured attorney fees offer tax advantages—and more
Are you interested in learning how structuring your contingency fees can help preserve and grow your income?
As you're painfully aware, contingency fees paid to you at the close of a successful case are subject to income taxes.
A large fee can be quickly cut down to size at tax time.
Structuring those fees so that they are dispersed in regular payments over time can defer taxes, ultimately reducing
your tax liability–and more.
"Keith provides innovative products and has relationships within the industry that enable him to assist attorneys
and their clients in settling cases." – James Greenberg, Attorney
The facts
Not only personal injury lawyers, but any lawyer who has earned a contingency fee can receive periodic payment of that
fee through a structured settlement arrangement.
Smaller payments over time may help reduce income taxes right away, and because they're deferred, payments may be taxed
at a lower rate if they are received in retirement years.
However, unlike retirement plan payouts, a structured settlement plan enables you to begin receiving payments at any
age—no waiting until age 59 ½. A properly structured plan enables you to receive this flow of cash outside of a SEP
or profit sharing plan.
In the same way that structured settlements can benefit your clients, they can benefit you with a secure, guaranteed
income flow. You can grow wealth by investing some or all of your fee in an interest-earning annuity from a top-rated
insurance company. You can also schedule this income to provide money for college tuition and other planned expenses.
Safety and growth for your money
Structured settlements grow your fees and prevent them from shrinking, regardless of stock market conditions.
Think back to October 2007, when the Dow Jones Industrial Average (DJIA) was at 14,000. Earning a $500,000 fee then
and investing the net, after-tax proceeds of $300,000 would have grown nicely at that time of robust growth. But, if
the DJIA dove to 7,500 (as recently witnessed), your fee, invested in the stock market, would suddenly be worth
$160,700.
Think again of structuring your $500,000 fee in October 2007. The entire $500,000 would be invested, tax deferred.
It would earn a guaranteed rate of return on the entire amount. It would grow, apart from market volatility, on a
tax-deferred basis and enable you to receive periodic payments on a schedule of your choosing. You could sleep well at
night.
With all of the benefits of structuring attorney fees, it simply makes good business sense to take a look. Keith
has the answers. Call 212-233-5433.
Learn more about fee structuring:
Plaintiff Attorneys: Have You Considered Structuring Your Fees? Explore the Many Tax Advantages
The IRS Endorses Attorneys' Fee Deferral
Good News from the IRS: New Tax Law that Raised Questions Concerning Structuring Attorneys' Fees Clarified with Positive Results
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