Valdez Team - Structuring Your Attorney Fees

3 Key Considerations before Structuring your Attorney Fees

3 Key Considerations before Structuring your Attorney Fees



Want to make the best out of your Attorney Fees?


Then you’re in the right place.

Below we will go over 3 key considerations you must keep in mind before moving forward with Structuring your Attorney Fees.


  • Make sure that the attorney elects to defer his/her fees before settlement.

  • By doing this, the attorney will avoid any constructive receipt issues – and in doing so, will have a peace of mind regarding any tax concerns. As the attorney, if you are thinking about structuring your fees on a case – you should stay ahead of settlement and make sure you bring this up.



    Tip: A great way to be proactive in this regard is to simply have, within your fee agreement, something of the nature saying that the attorney may receive his/her fee in cash or as periodic payments.



  • Pay special attention to how the attorney’s firm is arranged.

  • It is usually the case that structuring the attorney fees for solo practitioners is relatively simple. However, depending on if the attorney is a partner or not, if the firm is an S-Corp, LLP, etc. – there are further legal & tax matters to address.

  • Consider the choice that an attorney has in the vehicle that they decide to go with when structuring their attorney fees.

  • Traditionally, an Attorney Fee Structured Deferral would be placed via a fixed annuity product through a Life Insurance Company. However, with different products and providers out there – there is a market for alternative options, where trust & investment companies take the place of assignment/life insurance companies (discussed above). Because of this, attorneys now have the option of an Attorney Fee Structured Deferral that can either involve traditional life insurance products or a portfolio investment model that is tied to the market. Depending on one’s risk tolerance & goals, one option may be better than the other for a particular attorney. (See article # 2 for a case analysis).


    Utilizing Attorney Fee Structured Deferrals should be a no-brainer, tax-planning strategy for attorneys that are paid on a contingent-fee-basis.


    For more in-depth information on Structured Attorney Fees, visit our blog or contact us for a free consultation.

For more information on Structured Settlements contact us for a free consultation.


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