Summit Structured Settlements
755 S.E. Frontier Suite 101
Waukee, Iowa 50263
Voice: 515.987.6888
Fax: 515.987.6999
Toll Free: 866.267.1177
info@summitsettlements.com
Disclaimer
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Structured Attorney Fees
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What are structured attorney fees?
The U.S. Court of Appeals for the 11th Circuit has affirmed that attorneys who
defer the payment of their fees pursuant to a structured settlement are not
required to include them 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).
Therefore, income taxes on attorney fees from the tort award are payable only
when the amounts are received in each annuity payment.
Incorporating an analysis of the structured attorney fee on any large case is a
prudent and viable financial-planning tool.
The advantages include:
Cash flow management
Customized income stream
Retirement planning
Income tax deferral
The focus for attorney fees on any case can be negotiated to effectuate tax
deferral. The end result is a guaranteed rate of return which is equivalent to a
higher taxable rate.
Spreading fees over several years avoids a higher tax bracket and allows the
money saved in taxes to be invested at little or no risk with no money
management fees. As an added feature, the moneys in a structured settlement may
be exempt from creditors.
Structured attorney fees offer many of the same tax deferral benefits of the
traditional qualified retirement programs without all of the administrative and
regulatory requirements. |
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