Structured Settlements 4Real®Blog 2026

Structured settlements expert John Darer reviews the latest structured settlements and settlement planning information and news, and provides expert opinion and highly regarded commentary. that is spicy, Informative, irreverent and effective for over 20 years.

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The STRUCTURED SETTLEMENTS 4REAL® Blog is a highly regarded source for structured settlement news, information, and commentary, led by structured settlement and settlement planning subect mater expert John Darer CLU ChFC MSSC CeFT RSP CLTC. With two decades of operation, the blog and 4structures.com are recognized as comprehensive resources, offering detailed guides and specialized insights. Established in 2005, the blog caters to a broad audience, including legal professionals, injured individuals, families, and various stakeholders, providing reviews and opinions on settlement planning. John Darer, President of 4structures.com LLC, is a seasoned structured settlement expert with over 40 years of financial services experience and 31 years specializing in structured settlements. Based in Stamford, CT, he is a Certified Financial Transitionist and Registered Settlement Planner, holding insurance licenses in 45 states and the District of Columbia. John Darer is dedicated to transparency and advocacy, he emphasizes the importance of engaging trained and licensed professionals for settlement planning, offering valuable insights through his investigative journalism and professional commentary.

Structured Attorney Fees to Defer Income and “Day After Tomorrow” Loans

by John Darer CLU ChFC CSSC

A number of companies have introduced innovative programs for lawyers whereby the lawyer structures his/her/its legal fees and then takes out a loan purportedly secured by the same structured legal fees. One program is proprietary to a particular producer group and the other is an open source program. Both were promoted at a reecnt Mass Torts Made Perfect conference.

In the broadest sense, with the concept the lawyer (1) gets to defer receipt of income via the structured legal fees; (2) a loan is obtained and funds are received shortly thereafter as a tax free loan. Purportedly one company’s program can loan as high as 92% of the present value of the deferred fees. The loan is underwritten like a loan typically would be and an interest rate is charged as one would be on a typical loan. The rights to receive the structured attorney fees payments are used to secure the loan with the lender. One firm purportedly has “a tax opinion letter”. While I have not seen the letter, a tax opinion letter authored by a law firm is not binding on the IRS.

My initial observation is that this approach makes it absolutely critical that lawyers and law firms get proper advice when structuring attorney fees.

It may be helpful to imagine this worst case scenario:

You’ve entered into a series of structured attorney fee transactions. You’ve then taken out a loan or loans secured by the rights to receive the structured attorney fee payments. Ease on down the road a bit and you get a visit from your friendly IRS auditor. As part of the audit there is scrutiny of your structured attorney fee transactions. You are asked to produce documentation to support your fee deferrals. There is a determination that your retainer agreement was defective and/or that your firm didn’t take adequate steps to document the structured attorney fee program. the IRS tags you for underreported income, penalties and interest. You are in a cash flow crunch period and you’ve spent all the loan proceeds.  What do you do?

BE PREPARED!

This applies to both the attorney and/or law firm and the lender

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One response to “Structured Attorney Fees to Defer Income and “Day After Tomorrow” Loans”

  1. Mark Wahlstrom Avatar
    Mark Wahlstrom

    John,
    Great points. The key to any structured legal fee in my opinion is exceptionally careful up front work that starts with the fee agreement between the attorney and client. This isn’t a “product sale” as much as it is a sure to be closely scrutinized tax transaction that will require a clear documentary trail from fee agreement, to settlement documents, to policy issue, etc. If the “process” isn’t consistent you will have issues no matter how you structure your fee.

    Reply

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