The Implications of Attorney Fees on Your Structured Settlement
However, when it comes to structured settlements, there are certain aspects that require close examination. One of these aspects is the attorney fees associated with structured settlements. In this article, we are going to explore the implications of attorney fees on your structured settlement.
Understanding Structured Settlements
First, let's take a quick look at structured settlements.
A structured settlement is a financial agreement in which a plaintiff receives compensatory payments from a defendant. The payments are made in installments over a set period of time.
The benefits of a structured settlement include tax-free payments, guaranteed payments, and flexibility in payment scheduling. Additionally, a structured settlement can provide long-term financial security for the plaintiff.
Structured settlements are typically used in cases involving personal injury, medical malpractice, and wrongful death.
Attorney Fees in Structured Settlements
Attorney fees are an important aspect of structured settlements because they directly impact the amount of compensation a plaintiff receives. Attorney fees are typically calculated as a percentage of the settlement amount.
The percentage can vary depending on the attorney and the nature of the case. On average, attorney fees for structured settlements can range from 10% to 20% of the settlement amount.
It's important to note that attorney fees are typically paid out of the plaintiff's compensation. This means that the plaintiff will receive a reduced settlement amount due to the attorney fees.
The Implications of Attorney Fees on Your Structured Settlement
The implications of attorney fees on your structured settlement can be significant. Here are a few things to consider:
1. Reduced Settlement Amount
As mentioned earlier, attorney fees will reduce the settlement amount that a plaintiff receives. This can have a significant impact on the long-term financial security of the plaintiff.
It's important to keep this in mind when negotiating the terms of your structured settlement. You should work with your attorney to ensure that the attorney fees are reasonable and do not substantially reduce your settlement amount.
2. Impact on Taxes
Structured settlements are typically tax-free. However, if the attorney fees are paid out of the compensation, then the plaintiff may be liable for taxes on the reduced amount.
This is an important consideration when negotiating the terms of your structured settlement. You should work with your attorney and a tax professional to determine the tax implications of the attorney fees.
3. Equity in the Settlement
Finally, it's important to consider the equity in the settlement. If the attorney fees are too high, then the plaintiff may not receive a fair and equitable settlement.
It's important to work with your attorney to ensure that the attorney fees are reasonable and do not substantially reduce the settlement amount. This will ensure that you receive a fair and equitable settlement.
Conclusion
In conclusion, the implications of attorney fees on your structured settlement can be significant. These fees can impact the settlement amount, taxes, and equity in the settlement.
It's important to work with your attorney to ensure that the attorney fees are reasonable and in line with industry standards. Additionally, you should work with a tax professional to ensure that you are aware of the tax implications of the attorney fees.
A structured settlement can provide long-term financial security for plaintiffs. However, it's important to understand all aspects of the settlement, including attorney fees, before agreeing to its terms.