We work closely with you at every step of the structured settlement process to ensure all parties' needs are met...and we also work for you by helping you invest in a financial future with structured attorney fees. Using a fee structure, all or part of your attorney fee can be deferred pre-tax and paid over time, and you’ll receive the same tax-deferral benefits as a Qualified Pension Plan without the hassle of having to adhere to the requirements of a qualified plan, including how much money you can put in. You can defer taxes on your fees, as well as the interest that it earns, until the year in which payment is actually received from the fee structure. In addition, spreading fees over several years avoids a higher tax bracket and allows the money saved in taxes to be invested at little or no risk with no money management fees.

Structured Financial Associates has three options for structuring attorney fees:

Structured Attorney Fee
Fee Structure Plus™
Enhanced Attorney Fee Structures  

A Structured Attorney Fee works very much like a non-qualified deferred compensation plan. At the time the case is settled, the taxes that would usually be paid on the attorney fee earned are deferred. Your attorney compensation then grows without tax. When payments of the fees are eventually received, the entire amount distributed during a year is taxable for that year. Based upon a taxpayer’s tax bracket, there may be some distinct tax advantages to entering into this type of arrangement, as opposed to being taxed on the entire attorney fee in the year the fee was earned and investing it after tax. Attorney fees are structured on a tax-deferred basis, not tax-exempt.  

Fee Structure Plus™ (FSP) helps plaintiff attorneys maximize the value of their hard-earned fees. Integrated Financial Settlements (IFS), the parent company of SFA, developed this unique and powerful program as an innovative alternative to traditional structured attorney fee annuity options. FSP enables a law firm and the attorneys associated with a particular case to defer the income and taxes on such case's contingency fee, while maintaining the ability to realize market-related returns on their future periodic payments.  By doing so, attorneys have several choices when considering the benefits of structuring their contingency fee income.  

Program highlights include:

  • FSP, in conjunction with the attorney’s advisors, can be specifically tailored to supplement the attorney’s financial or retirement plans.
  • Deferred funds may be placed with and managed by either a selected trust organization or the attorney’s own financial advisor/institution.
  • The timing and amounts of the payments of the deferred funds will be stipulated in the settlement and assignment agreements.
  • FSP can be used by an attorney on a stand-alone basis where the claimant decides to take their settlement in up-front cash.
  • There are no limits as to size of contingency fee that may be placed in FSP. The case minimum is $100,000.00.  

Enhanced Attorney Fee Structure (EAFS) provides deferred income through Vanguard Funds. In the current interest rate environment, obtaining potentially higher rates of return on a deferred attorney fee structure, particularly on shorter term payouts is extremely difficult if not impossible. For this reason, IFS worked with a current partner, Midwest Trust to establish the EAFS product. With EAFS the contingency fee is structured and paid over the period the attorney elects, but is funded with Vanguard Funds held and administered by Midwest Trust. Attorney fee structures are a unique opportunity for attorneys to defer Federal and/or State income tax on their fee, putting the funds lost to taxes to work for them* With an attorney’s contingent fee income, they now have the ability to decide between fixed payments with an annuity or the growth potential afforded by mutual funds held in the EAFS trust product. With the Enhanced Attorney Fee Structure, you can supplement a traditional guaranteed attorney fee structure with the performance of the highly respected Vanguard Funds. 

Investing in Vanguard Funds, Midwest Trust brings unique choices for deferred fee structures, including:  

  • A variety of Vanguard Fund choices
  • Potentially greater market-related returns
  • Affords possible hedge for inflation
  • Unique contingent-fee deferral opportunity
  • Customize Vanguard Fund selection to select your needs
  • Utilize pre-tax dollars to have funds allocated in Vanguard Funds
  • Proven industry leaders with Vanguard and Midwest Trust
  • A wide variety of fund choices offered by Vanguard through Midwest Trust  

The EAFS program can be utilized on a stand-alone basis or in conjunction with the attorney client’s structured settlement.

Further Resources:

SFA: Helping Attorneys Invest in Their Financial Future  

More Information on Fee Structure Plus  

More information on Enhanced Attorney Fee Structure (choose the EAFS tab) Or, contact Advanced Market Group at 866.512.7185 or support@mtcquotes.com  

*This information is provided for general educational purposes and is not to be relied upon as legal, tax or investment advice. For individual advice, please consult with your legal or tax advisors.