A structured attorney fee using FSP will pay out the structured fee as set forth in the settlement agreement, which will specify the timing and percentages of the distributions as agreed by the parties. Unlike a fixed structured settlement annuity where the amounts of the future payments are determined at the time of settlement, payments from the FSP will vary with the performance of the underlying investments. Defendants or insurers who are parties to the settlement will have to cooperate with the FSP arrangement. In the case of a Qualified Settlement Fund that agreement will be between the attorney and the administrator of the fund.
The investment options offered under FSP are 1) a variety of low-cost Vanguard mutual funds, 2) Active management by a selected investment management firm, or 3) an investment manager of the client’s choosing. The portfolio can be reallocated periodically.
The current fee structure is a 1% initial fee and a 1% annual fee. FSP’s investment manager under option 2 charges .25% per year. Under option 3 the client’s account would be charged the fee agreed upon with his own investment manager.
