Earn Tax-Advantaged Supplemental Income Without Lifting a Finger

You know that a successful legal career doesn’t necessarily equal a predictable paycheck. Case volume ebbs and flows, offering little certainty. 

Have you explored investment options that deliver regular income without taking time away from your practice?

Your Financial Weapon of Choice

Plaintiff attorneys have a leg up on their defense counterparts when it comes to investment options. Fee deferrals allow placement of an attorney’s contingency fees in a financial vehicle that spreads payments out over time. Payment streams can begin immediately or in the future (depending on the product), allowing you to create a predictable source of income to supplement your current cash flow or to support future expenses, such as college tuition or retirement. 

You may find additional benefits at tax time:

• Since payments will be spread out, you may be able to remain in your current tax bracket. Less taxes = more fees in your pocket.
• By deferring your payments as a part of your retirement nest egg, you may be able to take advantage of a lower effective tax rate in retirement.
• Your CPA can help you to determine if deferred fees will help reduce your AMT liability.
• You can strategize about how you contribute more into your other deferred 401k or cash balance plan.

Fixed Annuities

For several years, structured attorney fees using fixed annuities have been the deferral investment of choice. The plan design is flexible and there is no income cap, nor any annual or lifetime contribution limits. 

With no overhead or management fees, the guaranteed1 rate of return is comparable with many traditional investments. Payments are fixed and guaranteed, allowing you to set this stream of income on autopilot and pay taxes only on the income received within each tax year.

Fee Structure Plus®

Attorneys seeking additiona^l growth potential may want to explore Fee Structure Plus® (FSP) as an alternative. FSP uses a low-cost platform to invest your fees in market-based portfolios. In addition to providing many of the same benefits as fixed annuities, FSP accounts can be managed by your financial advisor as a part of your comprehensive financial portfolio. You can defer unlimited amounts of contingency fee income, with taxes payable only in the years in which you receive your FSP payments.

Alternative Options for Attorney Fee Deferrals

Other attractive options employ a variety of underlying investments, including Vanguard Funds, U.S. Treasury Bonds and fixed indexed annuities. The varied investments offer a broad range of solutions to diversify your portfolio and maximize your wealth management and tax planning efforts.

Contact Us Today

At Kaas Settlement Consulting, our goal is to help claimants live comfortably and not worry about having enough money to meet their basic needs 5, 10 or 15 years from now. Contact Kaas Settlement Consulting today to take the next steps to protect your clients and your practice.

1 Guarantees are subject to the claims-paying abilities of the issuing insurance company.