Earn Tax-Advantaged Supplemental Income Without Lifting a Finger
It’s no secret that a successful legal career doesn’t necessarily equal a predictable paycheck. Case volume ebbs and flows, offering little certainty. Plaintiff attorneys with an eye on the future are wise to explore investment options that deliver regular income with minimal effort. Fortunately, solutions exist that fit the bill without taking time away from your practice.
Attorney Fee Deferrals: Your Financial Weapon of Choice
Plaintiff attorneys have a leg up on their defense counterparts when it comes to investment options. Fee deferrals allow placement of an attorney’s contingency fees in a financial vehicle that spreads payments out over time. Payment streams can begin immediately or in the future (depending on the product), allowing you to create a predictable source of income to supplement your current cash flow or to support future expenses, such as college tuition or retirement. If you have an existing deferred comp plan, attorney fee deferrals are an excellent funding tool.
You may find additional benefits when it comes time to file your taxes:
- Since payments will be spread out over time, you may be able to remain in your current tax bracket, rather than moving up to the next bracket. Less taxes = more fees in your pocket.
- By deferring your payments as a part of your retirement nest egg, you may be able to take advantage of a lower effective tax rate in retirement.
- Your CPA can help you to determine if deferred fees will help reduce your AMT liability.
Fixed Annuities
For several years, structured attorney fees using fixed annuities have been the deferral investment of choice. The plan design is flexible and there is no income cap, nor any annual or lifetime contribution limits. With no overhead or management fees, the guaranteed1 rate of return is comparable with many traditional investments. Payments are fixed and guaranteed, allowing you to set this stream of income on autopilot and pay taxes only on the income received within each tax year.
Fee Structure Plus®
Attorneys seeking additional growth potential may want to explore Fee Structure Plus® (FSP) as an alternative. FSP uses a low-cost platform to invest your fees in market-based portfolios. In addition to providing many of the same benefits as fixed annuities, FSP accounts can be managed by your financial advisor as a part of your comprehensive financial portfolio. You can defer unlimited amounts of contingency fee income, with taxes payable only in the years in which you receive your FSP payments.
Alternative Options for Attorney Fee Deferrals
In addition to fixed annuities and Fee Structure Plus®, there are other attractive options that employ a variety of underlying investments including Vanguard Funds, U.S. Treasury Bonds, and fixed indexed annuities. The varied investments offer a broad range of solutions to diversify your portfolio and maximize your wealth management and tax planning efforts.
Contact Sage Settlement Consulting Today
Deferred fees provide you with a stress-free source of long-term, tax-advantaged income. To learn more, contact Kimberly Overby today.
Volatile Markets are No Match for this Financial Option- Kimberly Overby
Volatile Markets are No Match for this Financial Option
Trade wars? Historic tariffs? With uncertainty as to which direction the markets are heading, investors are considering the best strategies to protect their portfolios. Injured claimants are particularly vulnerable, especially those whose quality of life depends on a steady income. Fortunately, there is a solution that offers protection from market volatility while providing a source of stable, long-term income: structured settlements.
Steady Gains, Lasting Peace of Mind
Both the term and the rate of return for a structured settlement annuity are locked in, and payments are guaranteed1, so when the market drops—even in a recession—the structured settlement payments remain unaffected. Structured settlement annuities are issued by highly-rated life insurance companies, making them one of the safest, most attractive financial vehicles available.
With no overhead fees, structured settlement annuities often yield returns competitive with traditional investments. Certain life companies also offer a rider that provides additional growth potential based on the S&P 500—without any market loss.
Claimants who can incur a degree of market-related risk may want to consider combining a structured settlement annuity with a market-based structured settlement program. Such an approach creates a truly balanced settlement solution.
Your Client Needs a Solid Plan
Claimants have a one-time opportunity to structure their settlements. The decision must be made before settlement, and the settlement agreement must include the proper language. Your settlement consultant can walk your client through the various settlement options, helping to establish realistic expectations and to ensure that a proper plan is in place to preserve the settlement proceeds.
You Need a Plan, Too
Many of the nation’s leading attorneys leverage the benefits of structured attorney fees to defer taxes on their contingency fees. As with structured settlements for claimants, attorney fee structures provide guaranteed, fixed income to create a predictable source of income immune to market volatility.
Take Control of Your Financial Future: Contact Us Today
None of us can control the economy, but we can mitigate some of its negative implications. Contact Kimberly Overby today to protect your clients and your practice.