FAQ

Common Questions From Attorneys Considering Deferral

If you don't see your question here, that's exactly what a consultation is for.

What is a fee deferral?

An election, made before you have a right to receive your fee, to invest it on a pre-tax, tax-deferred basis instead of taking it as taxable income the year the case resolves.

How is this different from a structured settlement annuity?

A structured annuity generally requires assigning the fee to an offshore assignment company, involves defense counsel's cooperation, fixes your payment term at the outset, and locks you into a single fixed rate of return. This program is invested in your choice of assets, doesn't require an offshore entity, and lets you adjust your payment schedule within the plan's rules.

How is this different from a 401(k)?

No IRS-imposed annual contribution limit, and no 10% early-withdrawal penalty tied to age 59½.

Is there a minimum I need to defer?

[fill in: your actual minimum, or "no minimum"] — some programs in this space have no minimum, others suggest $25,000+ as a practical floor.

What does it cost?

[fill in: your actual fee structure] — attorneys evaluating this will ask for a specific number, not "affordable" language, so this needs a real answer before launch.

Can I change my payment schedule later?

Within the plan's rules, unneeded payments can typically roll forward — but the underlying election generally can't be casually unwound. Any flexibility has to be built into the plan design upfront.

Who holds my money?

An independent, regulated custodian — not commingled with law firm operating funds, and not held by us as principal.

What happens if I die before payments are complete?

Deferred amounts are typically treated as Income in Respect of a Decedent (IRD). Your named beneficiary or estate can generally continue receiving scheduled payments.

Has the IRS challenged arrangements like this?

The core Childs precedent stands. A 2022 non-binding IRS memo (see the legal foundation section) raised questions about certain structures — which is exactly why proper design and independent tax advice matter.

How do I get started?

Reach out before your case settles — request a consultation and we'll walk through whether deferral fits your situation.

Still have questions?

Let's talk through your specific case before your settlement closes.

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