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Permitted, Smart and Secure
Are you interested in structuring your fees? Whether it is for your retirement, your child's college education or leaving a legacy to future generations, structuring your fees is not only smart but is permitted and secure.
Learn more and earn Continuing Legal Education (CLE) credit
Would you like to learn more about structuring your fees? Do you need to earn CLE credit? Stay tuned for more information regarding an e-seminar hosted by Andrews Publications (a Thompson-Reuters company) in partnership with American General Life Companies. *
If you would like to pre-register with your name and company, click here to email us that information and we'll contact you when a date has been set. |
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Retirement
Name: Rick
Age: 35
Position: Partner
Interest in Structured Settlements: Retirement
Meet Rick, a 35-year-old attorney who just settled a major wrongful death case for his client. Rick is a partner in a small law firm and is concerned about his retirement portfolio. Suzanne, the structured settlement consultant who worked on the case with Rick, has broached the subject of structuring his fee before- but Rick is a bit skeptical. However, after seeing the headlines about falling stock prices and a slumping economy, Rick decides to have Suzanne run through some structuring scenarios with him to see how a structured settlement might help.
Rick's fee was $150,000 from the case he just settled and his goal is to retire when he turns 55. Suzanne is able to place that $150,000 fee in an annuity contract that will guarantee a monthly check in the amount of $2,611 for life when he turns 55. Rick cannot outlive payments, but if he does pass away within the first 20 years of the annuity contract, his family will receive the monthly checks for months remaining (for this life annuity with 20 years guaranteed). With this guaranteed nest egg, Rick can rest assured that he will be able to cover basic expenses in retirement. Rick was also able to reduce his current taxable income and defer it until the time when he receives his monthly payments.
Education
Name: Alex
Age: 46
Position: Personal Injury Attorney
Interest in Structured Settlements: Funding children's college education
Meet Alex, a 46-year-old attorney who just settled a lengthy personal injury case. Alex is married with two children ages 6 and 8. Alex has been thinking about setting up a college education fund for his kids, but like many parents, is weighing all of the different options available to him. One option he did not consider was structuring his fee. However, after speaking about it with his structured settlement consultant, Dan, he learns that if he structures his fees from this case, he can ensure that he will have a sizable amount of money saved for his children's education.
Alex made a total of $136,000 in fees from his latest case and wonders if that will be enough to fund college for both of his children. Dan is able to structure Alex's $136,000 fee into two portions -- so that he has $30,0000 payable for each of the four years that his oldest child will be in college beginning in 2019, and then $30,000 for each of the four years that his youngest will be in college, beginning in 2012. Alex does not have to worry that he won't have enough money year to year for education because by structuring just one of his cases, Alex is able to fund $240,000 in guaranteed payments to help fund his children's college education.
Tax Planning
Name: Mike
Age: 52
Position: Owner of a small law firm
Interest in Structured Settlements: Tax purposes
Meet Mike, a 52-year-old attorney who has just settled a case and is about to receive a fee of $500,000. Mike has had a solid case load all year and while business is good, he is concerned about the amount in taxes he will owe. Also, he can not be too sure that the coming years will be as profitable as this year and wants to make sure he has a steady income stream even when business is down. After discussing this issue with Elaine, the structured settlement consultant he usually works with, she informs him that structuring his fee over the course of 10 years will help lessen his current taxable income, and ensure a dependable income stream for the next 10 years.
Curious about how this would work, Mike asks Elaine to show him an illustration. Elaine shows him that by placing his $500,000 fee in a structure, he can begin to receive an annual payoutt of $64,325 that will last for a period of 10 years. By doing so, Mike avoids taking a large hit on his taxes and defers the income until later when his income may not be as high. Mike can choose how to have this income be paid out (such as monthly or quarterly) depending on his situation. In addition, Mike can use that additional income to pay fixed costs in his law firm, invest it for retirement or use it for whatever personal expenditures he sees fit. In total, Mike will receive $643,256 in payments over the next 10 years and won't have the initial tax hit upfront.
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Annuities issued by: American General Life Insurance Company (AGL) 2727-A Allen Parkway, Houston, Texas 77019 Contract Number 01015
American International Life Assurance Compay of New York (AILife) 80 Pine Street, New York, NY Contract Number SSA-202
The underwriting risks, financial and contractural obligations and support functions associated with the annuities issued by AGL or AILife are the issuing insurer's responsibility. AILife is authorized to conduct insurance business in New York. Policies and riders not available in all states. Guarantees are subject to the claims-paying ability of the issuing insurance company.
American General Life Companies, www.americangeneral.com, is the marketing name for the insurance companies and affiliates comprising the domestic life operations of American International Group, Inc., including AGL and AILife. This contract is not insured by the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board or any similar agency.
The contract is not a deposit or other obligation of, nor is it guaranteed or endorsed by, any bank or depository institution.
This website is for discussion purposes only. This website does not provide a full discussion of significant tax, financial, or legal issues associated with the structured settlement of attorney fees. AGL, AILife, its employees, agents, and/or representatives do not provide tax, legal or financial advice. No representation or warranty, express or implied, is made by AGL, AILife or its affiliates as to the completeness of the information on this entire website. The information should not be construed as tax advice. You must rely on your personal tax, legal, and/or financial advisor in determining any adverse tax consequences in your structured settlement.
*Any transactions that you enter into with a vendor, merchant or other party listed in this site or linked from this site are solely between you and that vendor, merchant or other party. American General Life Companies is not responsible for any such third party content that may be accessed via this site.
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