ATTORNEY FEE DEFERRAL STRATEGIES

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WHAT IS AN ATTORNEY FEE DEFERRAL STRATEGY?

As a plaintiff attorney, you work very hard to protect your clients and ensure the success of their case. As your trusted broker, we will work equally as hard to protect your interests and strategically ensure the protection and growth of your fees over time. Implementing a structured settlement strategy to defer all, or a portion of, your fees offers favorable income tax advantages and protects your guaranteed earnings over time.Traditional annuities, or market-based structures are available to you, whether your client chooses to structure their proceeds or not. 

Using a fixed income annuity, the insurance company (or defendant) directs your fee to a third-party assignment company. Next, the assignment company uses those funds to purchase an annuity through a structured settlement carrier. Finally, the annuity carrier makes payments to you, the attorney, following a chosen payment schedule. By transferring your fees to an assignment company, you avoid collecting a constructive receipt and are, therefore, able to defer your responsibility to pay taxes until that income is received in your annuity payment.

 

For more information please review Childs v. Commissioner, 103 T.C. 634 (1994), aff’d, 89 F. 3d 856 (Table)(11th Cir. 1996)

 

Annuity payments can be made via direct deposit into your bank account and are noted as 1099-MISC income, taxable ONLY during the year(s) the deposits are received.

 

Market based & non-fixed annuity options are available for attorneys with higher risk tolerance and are subject to a variety of minimum investment requirements.

HOW ARE THEY ARRANGED?

Structured settlement plans are fully customizable and can be quoted in any variety of following payment schedules, depending on the amount.

  • Single Lump Sum

  • Monthly, Quarterly, Semi-Annual, Annual

  • Multi-year Payment Plans

  • College Payment Strategy

  • Payments for Life

  • Tax Deferred Income

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WHAT ARE THE BENEFITS OF THIS OPTION?

Market-Based Structured Settlements are a great way to defer the income tax penalty on your contingency fees. Place your funds in a market based portfolio, managed by your financial advisor, and enjoy the benefits of higher returns, pre-determined payment periods and lower taxable income.

  • Guaranteed Growth & Return

  • Locked in interest rates protect you from market volatility

  • You cannot lost money in a structured settlement

  • 100% TAX DEFERRED

  • No Fees. No ongoing administrative, management or maintenance fees.

We’d love to work with you!