Solutions
Taxable settlements
Taxable settlements can be structured too. Receiving the money over several years, instead of in one up-front lump sum, can keep more of it out of the highest tax brackets.
Our expertise
Projections built on your finances
We have the expertise and software to project the savings from receiving payments over time, using a claimant's own circumstances: other income, assets and deductions. Our illustrations show the estimated dollar savings and the rate of return, so the claimant can make an informed decision.
Examples
Which settlements are taxable
The most common are employment cases: wrongful termination, sexual harassment, and age or sex discrimination. Whistleblower awards and other taxable settlements can also be structured so the payments arrive over time.
An illustration
A $1 million employment settlement
Consider a $1 million sexual harassment settlement for a single 30-year-old Illinois resident who keeps working at a salary in the mid-$30,000s. She receives $500,000 in the first year ($100,000 in cash and $400,000 for fees and expenses). An annuity spreads the remaining $500,000 over the next 10 years.
Our calculations show she ends up with about $115,000 in returns over the 10-year period, which is a roughly 23% return on the original $500,000, before any taxes. Each annual payout also keeps her out of the highest tax brackets, which results in about $60,000 in savings.
Illustration only, based on tax law at the time it was prepared and many other assumptions we're happy to share. We prepare a detailed illustration for each case.
Non-deductible fees
Punitive damages
In some cases, such as punitive damages, attorney fees and expenses are not tax deductible. Punitive damages should be structured whenever possible: structuring $500,000 of punitive damages over five years can save well over $130,000, a return of more than 20%.
Talk with our brokers about your case
No pressure and no jargon. A short conversation is often the clearest way to see your options.