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The Viability Of Structured Settlement Attorney Fees

An alternative to being compensated with a lump sum fee is the use of structured settlement attorney fees. This method permits attorneys to accept fee payments over a protracted time period, and on a tax-deferred basis. This way, an attorney can pay the tax on the fees when the payments are made. The good news for attorneys is that they can structure their fees independent of the client’s choice of settlement, be it lump sum or structured.

This type of set-up has been affirmed by The 11th Circuit Court of Appeals. As a result, attorneys do not have to include deferred fee payments as taxable income until the year that the payments are received. The same holds true for fees from Tort Awards. A Form 1099 is used for reporting the payments. There are some distinct advantages for attorneys that choose this route.

Advantages For The Attorney

By using a structured settlement, the legal fees will be distributed over a period of years. Very often, this helps avoid the attorney being thrust into a higher tax bracket. At the time of the settlement, a decision can be made when payments should begin. There is no need for a waiting period. A Low-Risk Foundation can be created to diversify portfolios.

            * College Plans: It is great to have a college-fund for your children. A college plan that is State-Sponsored, or obtained through an Institution, will have restrictions attached, such as: How is the money going to be allocated, the selection of schools, or any set asides.

            * Expenses Of Overhead: As Tort Reform picks-up steam across the country, the difficulty in landing a successful settlement has become more difficult. With this in mind, an attorneys income will fluctuate according to the success of their cases. The use of a structured settlement for attorneys fees will provide a stable income source, well into the future. Now there will be dependable income that will come in handy to finance drawn-out cases, and office overhead.

            * Create Plans Within Your Practice: Partners retire, and a properly structured fee arrangement can simplify a partner buyout. Let’s not forget about Bonus Plans. This can be used with Associates, tying in future earnings to continuous employment, giving the Associate a good reason to stay with the firm. It is also a great way benefit from a Qualified Pension Plan, without the usual hassles of admin and regulations that accompany Employee Benefit Plans.

            * Dollar-Cost-Averaging: This can be a great method of funding an equity-account. A fee can be set-up to be paid into a brokerage-account, which translates into investing on a consistent basis. More shares can be purchased at reduced prices, and less shares at the higher prices. Thusly, you can avoid the perils of market volatility.

Structured Settlement attorney fees allows for a reduced exposure to taxation, while allowing the attorney to secure a desirable rate-of-return that is guaranteed.