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Structured Settlement Planning for Trial Attorneys: The Benefits of Using Qualified Settlement Funds and Private Placement Insurance Products  

Author:  Gerald R.  Nowotny .

Source: Volume 30, Number 03, Spring 2013 , pp.77-94(18)

Journal of Taxation of Investments

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Trial attorneys who receive contingency fee income have “spiked” income, and face income taxation on contingency fee income, depending upon the jurisdiction, of 39.6 percent to over 50 percent. This article outlines strategies that attorneys who receive healthy contingency fees can use to achieve tax reduction and tax deferral. The strategies utilize the qualified settlement fund (QSF), a highly flexible structure with no limitations on duration or amount of contribution, in combination with split dollar life insurance and private placement life insurance to allow the trial attorney to convert compensation income that would be taxed at the highest marginal rates into tax-free benefits during lifetime as well as at death.

Keywords: deferred compensation arrangement, qualified settlement fund, IRC Sec. 468B, split dollar life insurance, private placement life insurance

Affiliations:  1: Long Gray Line Consulting, LLC.

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