The Tax Savvy Approach to Growing Your Contingency Fee.
For many trial attorneys, managing the financial pressures of a contingent fee practice can be challenging. With the constant need to fund cases and retain current partners & associates, all while keeping retirement planning in mind, a solid financial strategy is essential. Enter structured attorneys’ fees—a useful tool enabling contingent fee lawyers to defer some or all of their fee on a case-by-case basis. This tax-smart solution allows attorneys to grow their income, defer taxes, and create financial confidence for the future.
Getting Started with Structured Attorneys’ Fees
A structured attorneys’ fee allows attorneys to defer their contingency fees into a series of future periodic payments, much like an uncapped 401(k) plan. Whether or not the plaintiff decides to structure, this tax-saving approach provides future scheduled payments directly to the attorney.
Unlike other financial vehicles, a structured attorneys’ fee is guaranteed without ongoing administrative costs. These customized payments are tax-deferred, meaning taxes on the deferred portion are paid only in the years of actual receipt, rather than upfront in the year of settlement. With this unique approach, contingent fee attorneys position themselves to create a deferral fee strategy with unlimited contributions and the flexibility to create financing for almost any immediate need and long-term goals.
Why Should You Consider Structuring Your Fees?
Offering only highly rated (crème de la crème) life insurers, our clients utilize tried, trusted, and approved traditional and/or index-linked annuity based attorneys' fee structured settlement products, creating a solution to the potential financial unpredictability related to a contingent fee practice.
With the flexibility of unlimited contributions and a customized payment stream, the amount being structured does not have to be large. Many attorneys structure a small portion of multiple fees throughout the year and over several years, resulting in large amounts of future tax-deferred guaranteed income which is not subject to stock and/or bond market fluctuation.
Structured Attorney Fees Provide:
Tax Deferral: Spread tax liability over time, potentially lowering tax rates.
Customizable: Tailor periodic payments to meet your current and future needs.
Diversify Portfolio: Protection against market volatility.
Firm Financing: Fund future cases, firm overhead, and retain partners & associates.
Retirement Planning: Gain peace of mind, with a guaranteed income stream.
The Process Explained
When exploring a structured attorney fee, timing is key, as you must decide to structure your fee before the settlement is finalized, avoiding constructive receipt. Engaging your own structured settlement expert, Your Team at Creative Capital, is also essential, as it ensures you have a reliable partner throughout the process and eliminates the risk posed by assuming your adversary’s consultant will put your interests first.
Once involved, your consultant will work with you to design a customized payment schedule comprised of periodic payments, lump-sum(s), or a combination of both. The payments are funded through an annuity issued by a highly rated life insurance company, providing steady, guaranteed income.
Next, Creative Capital’s legal team drafts (or reviews and revises) settlement documents to ensure compliance with appropriate tax laws, critical to ensuring you receive the IRS recognized tax-deferral treatment you are entitled to. Upon completion, the structured settlement is finalized. By taking these steps, attorneys can enjoy the benefits of tax-deferred income, reliable payments, and peace of mind, knowing the fee structure follows IRS guidelines.
Achieving financial security, while remaining in compliance with the appropriate tax laws, requires a specialized expertise. With over 40 years of experience, Creative Capital offers unmatched expertise and award-winning service.
With Creative Capital, all structured settlement services are provided to you Free of Charge. Thus, no ongoing administrative or other fees are charged. Instead, we are paid directly by the life insurance companies that issue the annuities as outlined in our CORA structured settlement affidavit, created to ensure all parties receive the highest caliber of ethics and transparency on cases handled by CCI. No other structured settlement firm offers this level of accountability on every case.
Take Control of Your Financial Future
Whether you are looking to secure your retirement, fund future firm obligations, provide for your children’s or grandchildren’s higher education, or simply gain peace of mind, structured attorneys’ fees offer a consistent, customizable, and guaranteed solution. By deferring your fees strategically, you can reduce tax liability, mitigate market risks, and achieve your financial goals.
Ready to explore how structured fees can benefit your practice?
Contact Creative Capital today for a free consultation.
Start 2025 with a plan that works as hard as you do.
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