As an attorney, you can enjoy some of the same benefits as your personal injury clients by structuring contingent fees for future payment. This unique benefit can defer your income for future needs such as:
- Children's education
- Stabilizing income for your practice
Pacific Life allows you to customize your payments specifically to help manage future needs.
Benefit types include:
- A lifetime of income that you cannot outlive. Structuring fees also can protect both you and your spouse.
- Growth potential with the optional Index-Linked Annuity Payment Adjustment Rider.
- Payments for a specific period to help eliminate possible concerns such as paying your home mortgage or funding education costs for your children.
- Lump sums to help pay for a large purchase.
Structured Attorney's Fees vs. a Taxable Investment
By structuring your fees, you may reduce your current and overall income-tax burden by postponing the income and spreading the taxable income over time. Instead of being taxed now on the entire amount, your income payments are reported to the IRS in the year you receive them.
A complete payment schedule, including how each alternative is taxed, is outlined below. Click the table to view.
- The original Acknowledgement and Hold Harmless Agreement for Attorney’s Fees Form which confirms that Pacific Life does not offer tax or legal advice and the decision to structure is wholly the responsibility of the attorney.
- Acknowledgment language included in the Settlement Agreement and Qualified Assignment and Release documents.
- Request for Taxpayer Identification Number and Certification (W-9).
- Standard forms required include: application, proof of age (if applicable), Settlement Agreement, Qualified Assignment, and Release Agreement
Payments to You or Your Firm
By electing to have payments made to your firm, you can guarantee income to help meet payroll needs or pay your business mortgage.
Careful consideration must be taken to avoid constructive receipt of the fees. The settlement agreement must be completed before the judgment is final and without any "property" being transferred to you. After the judgment is final, you are considered to be in constructive receipt of the fees and will be subject to immediate taxation.
Design a Benefits Package to Fit Your Needs
- Start payments immediately or defer the payment start date up to 20 years.
- Add a cost-of-living adjustment to help offset inflation.