As an attorney, you spend your career helping clients achieve justice and financial security. But are you applying the same strategic foresight to your own income? Attorney fee deferrals offer a powerful way to smooth out income, minimize taxes, and build long-term financial stability, all while keeping your money working for you.
Why Consider a Fee Deferral?
Attorney fee deferrals allow you to postpone recognition of contingency fee income until future years. Many attorneys spread the payments out to coincide with retirement, education funding, or other major life milestones. By deferring your fees, you can:
- Reduce your current tax burden by shifting income into future years when your tax rate may be lower.
- Smooth out irregular income from large settlements or verdicts.
- Build long-term wealth through diversified, market-based investment options.
- Plan strategically for retirement or firm transitions without the immediate tax hit.
Fee deferrals are available to plaintiffs’ attorneys in contingency fee cases, as long as the election is made before the settlement funds are received, making timing critical.
Real-World Examples
Case Example 1: The Retirement Planner
Sarah, a personal injury attorney in her early 50s, received a $1.2 million contingency fee from a major settlement. Rather than taking the full amount upfront and facing a significant tax bill Sarah worked with her Sage consultant to defer $800,000 into a market-based deferral plan. The funds are now invested and scheduled to pay out annually beginning at age 60, supplementing her retirement income while optimizing her tax position.
Case Example 2: The Growth Strategist
James, a managing partner at a small firm, wanted to invest in his firm’s expansion but also needed to stabilize his income. By deferring a portion of his fees from several large cases, he created a predictable annual cash flow stream over the next 10 years. This strategy allowed him to reinvest in his practice, hire additional staff, and plan confidently for the firm’s future.
Partner with Sage Today
With decades of experience in structured settlements and fee deferrals, the Sage Settlement Consulting team helps attorneys design compliant, personalized strategies that make sense for their unique goals and timelines.
Don’t wait until your next big case closes. Fee deferral elections must be made before settlement proceeds are received. Contact your Sage consultant today to explore your options and start securing your financial future.