One of the greatest untapped areas for growth in the structured settlement profession is the structured attorney fee, aka, structured legal fee market. While there are no hard numbers to be gleaned from life and annuity industry data, casual evidence indicates that only a small minority of trial lawyers and attorneys take advantage of this incredible tax planning tool. The reasons why that has been the case prior to 2013 are quite clear, among them:
- Interest rates were low compared to historical averages on annuity programs and lawyers thought they could do better in the market.
- Tax rates were historically low and there was the lingering fear rates would go up, thus making deferral an unwise business and tax planning option.
- Lawyers often have major case debt that needs to be repaid, making structuring income forward an unrealistic option.
Now that 2013 has arrived and with it much higher state, federal and Obamacare taxes, the reality of paying well in excess of 50% on taxes for large fees is facing lawyers every day. The solution, as Mark Wahlstrom points out in this weeks commentary on Speaking of Settlements is to aggressively begin to educate trial lawyers and tax professionals on structuring attorney fees and why it makes sense for lawyers today. The tax savings alone can offset a great deal of financing debt and the ability to allocate funds into retirement vehicles can help to rebuild depleted pension accounts for trial lawyers all over the country.
Watch this weeks edition of Speaking of Settlements and learn more about the options lawyers have to structured their legal fees in 2013.