More and more attorneys are taking advantage of a new product available through structured settlement brokers and settlement planners – the structured attorney’s fee. In my own practice i've had a surge in interest and I predict in the coming months and years, tax deferral is going to be even more important for trial lawyers and the structured legal fee is the single best tool available. In a nutshell, attorneys are able to take large fees over time instead of in a lump sum, thus spreading their tax hit over a period of years instead of taking a huge hit in year one. Done correctly, this structuring will provide excellent financial and tax planning. “Bust or Boom” cycles can be evened out, and income taxes are only due in years when the payments are received. Structured settlement commentators such as myself,John Darer and Jack Meligan have all discussed the rising use of "non-qualified assignments" for structuring legal fees and other non-personal injury damages.
What about liquidity if and when needed? What about the unplanned crises where more money is needed? We all know about factoring, oh boy do we know about factoring. However, there is now a new alternative for lawyers to obtain loans against their structured legal fees that up until now has only been talked about in concept but not actually implemented.
Settlement Capital of Dallas, TX can now provide loans to qualified attorneys with structured fees. These are not governed by state structured settlement transfer laws or IRC 5891, so no court order is required (ordinarily). For more information, please watch this video interview with Matt Bracy and myself, Mark Wahlstrom.It outlines how these work, the process and how attorneys can start to take advantage of this unique tool. It's not for everyone, it is a LOAN, not factoring, but it has it's own unique advantages as well.
** Please note: Neither the author nor Settlement Capital Corporation offer any tax, legal or financial advice through this blog. Please consult your financial and/or tax professional.
If you have questions about this product please contact Matt Bracy at email@example.com, or by phone at 800-959-0006. He can fill you or your attorney in on the details of how this works.