As year-end approaches, plaintiff attorneys should remember that they can structure their fees. With just a few weeks left in 2010, now is a great time to consider cash flow planning.
Structuring fees allows attorneys paid on a contingent-fee basis to recognize taxable income as they receive their periodic payments. The entire fee can be used to purchase periodic payments with pre-tax dollars, providing a greater initial investment and potentially reducing their overall tax burden.
Contingent attorney fees that result from both qualified and non-qualified settlements can potentially be structured. The periodic payments can be customized to provide a stable income stream that can provide for retirement or ongoing expenses of the law firm. In addition, future lump sum payments can be established to pay for large anticipated expenses.