Attorney Fee Deferral:
By structuring some or all of your contingency fee to a later tax year, you may be able to reduce your taxable consequences and design your plan to receive the income when you see fit. This strategy always works best with input from your CPA or trusted tax advisor, who can counsel you regarding your particular situation.
Investment Options: Unlike your personal injury client who receives their payments as tax-free benefits, your fees are tax-deferred and only taxable when you decide to receive them. They can be invested in a range of financial products, whether fixed annuities or market-based structured settlements, to allow for more growth. Think of it as your own personal pension plan with no dollar limits or requirements to contribute for every employee or RMDs in retirement.
Flexibility: Payment schedules can be monthly, quarterly, semi-annually, annually, or in future lump sums. They can even be structured if the client chooses not to.
Legal Requirements: The ability to structure attorney fees must be included in the settlement agreement, and the fees are directed to a third-party assignment to avoid constructive receipt and defer the taxation to the year they are received.
Government Benefit Preservation, MSA & Trust Services:
Should my client establish a special needs trust, a pooled trust, a spend down trust, a trigger trust, a settlement preservation trust, an education trust, an ABLE account, or a combination of these trusts? What about an MSA if my client is currently receiving Medicare or is expected to receive Medicare SSDI benefits within 30 months of the settlement?
Allow us, after fact-finding, to advise you and your client on what would work best for them in their situation to preserve benefits and maximize their settlement with available collateral sources during the settlement process.