Fee Structure Plus®

As an attorney, you may sometimes receive structured attorney fees as part of a physical injury settlement or non-physical injury settlement. Prior to now, the structured attorney fee would be in the form of an annuity offered by highly rated life insurance companies. Payment options could be period certain, lifetime, and/or include lump sums. Returns are guaranteed but may be conservative to the financially savvy individual.

 

We want to introduce you to the market-based structured attorney fee... Fee Structure PlusⓇ. while there are other deferred attorney fee programs available, Fee Structure PlusⓇ, or FSP, allows you to get market-related returns, pre-tax, in one of several model portfolios, OR with your own financial advisor.

How will my payments be taxed?

 

You will receive a 1099-misc as the future payments are paid out. Your tax-deferred gains will be taxed as ordinary income.

 

Is there a limit on how much I can invest?

 

Unlike a 401(k) or IRA, Fee Structure Plus is an uncapped investment or retirement vehicle.

 

Is there a penalty for taking payments early?

 

Unlike a 401(k) or IRA, Fee Structure Plus is not subject to tax penalty when taking payments prior to age 59 and a half.

 

Do I still have to fix the payment schedule in advance?

 

Like a traditional structured attorney fee, you have to fix the future payment schedule in order to create the tax advantaged future payments. This is done with an assignment of the obligation of the future periodic payments.

 

If my gains will fluctuate with the market, how can I assign a payment schedule in advance?

 

Because it is a market-based program, we determine the future payments in units. This means you determine ahead of time how many “units” you will be paid with each payment. The initial unit value is $10 and the unit value at the time payments are due is determined by the underlying investment.  

 

When do I need to determine how I will receive my structured attorney fees?

 

The defendant or defendant’s insurer must agree to fund and execute a proper release and assignment agreement. It’s always best to start the discussion early regarding the opportunity to receive periodic payments using a market-based structured settlement. Make it part of the settlement terms.

 

What are my options for how to invest my fees?

 

Our main advantage in this market-based program is what we refer to as “open architecture.” The program not only allows you to match your risk profile to an investment strategy, we have three options: 1. A low cost, passive option (1% annual fee) 2. Active management through a program provider (An additional .25% annual fee) 3. Your own financial advisor (for an additional fee your advisor determines).

 
Am I able to directly control my investment?

 

Direct control of the assets destroys the tax deferred benefits we are trying to achieve. We establish an investment policy statement at the start that addresses the overall strategy and investment mix. You do have the ability to request a change in the investment policy statement up to twice a year, but not in consecutive quarters. The investment policy statement allows your financial advisor to make the investment/allocation decisions on your behalf and avoid constructive receipt issues.  

 
Am I able to pass the fees down to my children or grandchildren?

 

Maximum payout is limited to life expectancy (no generational skipping).

 
What are the different payment options for payment frequency?

 

Payment types are quarterly, semi-annually, annually, and/or lump sums. You decide how many units are paid and when. REMINDER: The payment schedule has to be established at the time of settlement and must be included in the executed release and assignment document.

 

Summary

 

Let us help you defer your entire contingency fee pre-tax and allow your own financial advisor to manage the funds. Fee Structure Plus offers you the flexibility to smooth out future income streams, plan for future life events, and/or plan for retirement.

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