Tax-Smart Planning for Settlements: Helping Plaintiffs and Attorneys Keep More of Their Settlements (On-Demand)

Course Description

This practical presentation equips plaintiff attorneys with essential insights into the complex landscape of legal settlement taxation. Attendees will gain clarity on differentiating taxable from non-taxable damages and explore specific tax complexities surrounding punitive damages and interest. We’ll also address significant impacts from recent legislation, including the Tax Cuts and Jobs Act and the One Big Beautiful Bill Act, highlighting the ongoing challenge of “double taxation” resulting from disallowed deductions for legal fees in many case types. Through real-world case examples, we’ll illustrate how innovative strategies like the Plaintiff Recovery Trust and Structured Settlement Annuities effectively reduce settlement taxes. Additionally, attorneys will discover methods for strategically timing their tax obligations on contingent fees and transforming taxable legal fees into tax-deferred or even effectively tax-free income, allowing them to maximize the long-term value of their settlements.

Syllabus

1. Understanding Settlement Taxation
2. Tax Pitfalls of Punitive Damages and Pre- and Post-Judgment Interest
3. The Double Tax Problem Due to the Tax Cuts and Jobs Act and the One Big Beautiful Bill Act
4. Reducing Plaintiff Tax Burdens with Trusts and Structured Settlement Annuities
5. Tax Timing Control for Plaintiff Attorneys
6. Attorney Options for Converting Taxable Legal Fees into Tax-Free or Tax-Deferred Income