Secure Your Own Future by Structuring Your Legal Fees
As a contingency fee attorney, you’re a natural risk taker—choosing a career where your financial wellbeing depends on factors beyond your control. Yet many successful plaintiff attorneys routinely structure a portion of their fees, choosing guaranteed future financial security over immediate payment.
The irony? By securing risk-free future income, you gain greater freedom to manage the risks inherent in running a successful law practice.
Tax Deferral for Maximum Tax Efficiency
High-income professionals face substantial tax burdens. Federal marginal rates can exceed 37%, and in states like California, combined federal and state rates can approach 50% or more. For attorneys whose income fluctuates significantly from year to year, the tax impact can be even more pronounced.
Without structuring, you might be taxed like a multi-millionaire one year only to see your income drop substantially the next. Structured Attorney Fees solve this problem by allowing you to spread income—and tax liability—across multiple years when it makes the most sense for your financial situation.
How It Works
- Before finalizing your client’s settlement, decide how much of your contingency fee you’d prefer to receive in the future
- Contact Finn Financial Group to discuss your options and design a payment schedule that meets your anticipated needs
- Choose whether payments go to you individually or to your law firm—each option offers unique tax planning opportunities
- We handle the paperwork and coordinate with all parties to incorporate your choice into the settlement agreement with the appropriate documentation
- The defendant or carrier purchases the annuity (through a Qualified or Non-Qualified Assignment), ensuring you avoid constructive receipt
- You’re taxed only when you receive payments—both principal and interest—spreading your tax liability across the years you’ve chosen
Important: Your client does NOT need to structure their settlement for you to structure your fees.
Plan For Tomorrow Today
For over 35 years, we’ve helped successful plaintiff attorneys secure their financial futures through structured attorney fees. When you compare the compounding value of tax deferral, competitive rates of return, and guaranteed future security, structured attorney fees are hard to beat.
Put your future in your own hands. Contact us before you conclude settlement discussions to explore your options.
Download our E-Guide: Structuring Your Attorney Fees
(Click the image below to download an e-guide from Finn Financial Group)
Contact Dan Finn Today
Whether you’re an existing client or exploring structured fees for the first time, we’re here to help. Don’t wait until everything is settled—now is the time to discover how Finn Financial Group can help you keep more of your hard-earned money.
Phone: 800.531.7466
E-Mail: Dan@FinnFinancialGroup.com
CA Insurance License: 0A96173
The information provided on this website is educational in nature and should not be construed as tax, legal, investment, or accounting advice. Tax laws are complex and subject to change. Please consult with your own independent tax, legal, and financial professionals before making financial decisions.
Frequently Asked Questions About Structured Attorney Fees
Q: What are structured attorney fees?
A: Structured attorney fees allow contingency fee-based attorneys to defer receipt of some or all of their fees to future years, rather than receiving everything in the year of settlement. The fees are paid through an annuity purchased by the defendant or carrier, meaning the attorney is taxed only when they actually receive each payment — not in the year of settlement.
Q: How do structured attorney fees reduce my taxes?
A: When a large contingency fee is received all in one year, it can push you into the highest federal and state tax brackets. In California, combined federal and state rates can approach 50% or more. By spreading income across multiple years, you may pay tax at lower marginal rates each year — potentially keeping significantly more of your earnings.
Q: Does my client need to structure their settlement for me to structure my fees?
A: No. Structured attorney fees are completely independent of your client’s settlement. You can structure your fees whether or not your client chooses to structure their recovery.
Q: What is constructive receipt and why does it matter?
A: Constructive receipt is the IRS doctrine that taxes income when you have an unrestricted right to receive it — even before actual receipt. To legally defer fees, the structure must be set up before the settlement is finalized and before you have the right to demand payment. The defendant or carrier purchases the annuity through a qualified or non-qualified assignment, keeping you outside constructive receipt.
Q: Is there a cap on how much I can structure?
A: No. Unlike retirement accounts, there is no statutory limit on the amount of contingency fees that can be structured. You decide how much of any given fee to defer — all, some, or none.
Q: When do I need to contact you to set up a structured fee?
A: You must contact us before the settlement is concluded and before any funds are disbursed. Once a check has been issued or funds placed in your trust account, structuring is no longer possible. The earlier we are involved, the more options are available to you.