by John Darer® CLU ChFC MSSC CeFT® RSP CLTC
What is Attorney Fee Deferral?
Attorney fee deferral is a financial planning strategy in which a lawyer or law firm's contingency fees are paid over time based on an agreed schedule. Taxes are paid when payments are received.
An attorney fee deferral can be effectuated in a number of ways such as
- Structured attorney fees, funded by a fixed structured settlement annuity issued by a licensed insurer
- Structured attorney fees through with index linked periodic payment adjustments, issued by a licensed insurer. More here
- Structured attorney fees through future payments
- Attorney fee deferral through a deferred compensation program adapted for contingency fee lawyers using the same platform used by many Fortune 500 executives. that permits a market adjusted approach as well as unique flexibility and liquidity
Why consider attorney fee deferral?
- Stable income. income smoothing may be helpful to lawyers whose revenues are cyclical. Attorney fee deferrals through one or more of the above methods, can provide you with a predictable source of income either way.
- Supplement for your retirement plans. Attorney fee deferrals augment your retirement security, similar to traditional qualified retirement programs and IRAs, without contribution limits , or penalties if you receive payment prior to age 59 1/2 or after don' take out enough after age 70 1/2.
- Core low risk base for your investment portfolio. Attorney Fee deferral funded with fixed annuities can serve as a component of the stable foundation that allows you to invest other funds in higher-risk investments.
- Save taxes now and make the money work for you during the time before it is paid out.
- Source of income for predictable future life events.