This document discusses attorney fee structures that allow for income tax deferral, providing protection from creditors and lawsuits. It outlines the advantages and disadvantages of guaranteed payments, the potential returns compared to immediate taxation, and how structured fees can be utilized for retirement planning. It also mentions the internal rate of return for different deferral periods and emphasizes the need for careful consideration of individual circumstances.

1. STRUCTURE YOUR FEES. PROTECT YOUR ASSETS. GUARANTEE RETIREMENT. COPYRIGHT 2009 WILLIAM B. FAZIO © 8.5% Guaranteed? 08/24/09 [email_address]

2. UNDER CURRENT TAX RULES ATTORNEYS MAY DEFER INCOME TAXES ON THEIR PROFESSIONAL FEES. Attorney fee structures. 08/24/09 [email_address]

3. TAX DEFERRAL. GUARANTEED PAYMENTS. PROTECTION FROM CREDITORS, LAWSUITS & DIVORCE. What are the advantages? 08/24/09 [email_address]

4. ONCE ESTABLISHED, THE PAYMENTS CANNOT BE CHANGED, ACCELERATED OR ASSIGNED. What are the disadvantages? 08/24/09 [email_address]

5. YES. THERE IS A SECONDARY MARKET. OFFERS WILL BE A PERCENTAGE OF PRESENT CASH VALUE , NOT FUTURE PAYMENT VALUE. Can the payments be liquidated? 08/24/09 [email_address]

6. THERE ARE NO REQUIREMENTS. DEFER THEM TO RETIRE OR START THEM IMMEDIATELY TO COVER OFFICE EXPENSE. IT’S REALLY UP TO YOU. What can the payments be used for? 08/24/09 [email_address]

7. IF YOU INVEST THE PROCEEDS EITHER YOU, OR YOUR FIRM, OWN THE ASSET. WHAT RATE OF RETURN CAN YOU EXPECT? HOW WILL IT COMPARE TO GUARANTEED BENEFITS FROM A TAX DEFERRED FEE STRUCTURE? Why not just pay the tax and invest the net proceeds? 08/24/09 [email_address]

8. $300,000 PLACED IN A FEE STRUCTURE AND DEFERRED 10 YEARS CREATES $43,582 IN ANNUAL AFTER TAX INCOME. TO MATCH THAT BENEFIT YOU MUST GENERATE A PRE-TAX RETURN OF 8.52%. ILLUSTRATIVE PURPOSES ONLY. ASSUMES TAX RATE OF 40% ON LUMP SUM AND 30% ON DEFERRED INCOME. Can you get 8.5% year over year? 08/24/09 [email_address]

9. PAYING A 40% TAX RATE ON A $300,000 FEE RESULTS IN INVESTABLE ASSETS OF $180,000. STRUCTURING THE FEE ALLOWS YOU TO INVEST THE FULL $300,000. Can you consistently get that 8.52% return? 08/24/09 [email_address]

10. OKAY. STARTING IMMEDIATELY RESULTS IN $23,893 IN ANNUAL AFTER TAX INCOME. MATCHING THAT WOULD REQUIRE AN 8.48% PRE-TAX RETURN. ILLUSTRATIVE PURPOSES ONLY. ASSUMES TAX RATE OF 40% ON LUMP SUM AND 30% ON DEFERRED INCOME I don’t want to wait 10 years. 08/24/09 [email_address]

11. PAY THE TAX AND INVEST THE BALANCE AND YOUR ASSETS ARE EXPOSED TO LAWSUITS, CREDITORS AND DIVORCE. Protect your assets. Cash isn’t king. 08/24/09 [email_address]

12. FEE STRUCTURES UTILIZE THE ASSIGNMENT PROCESS. THE ASSIGNMENT COMPANY BUYS AN ANNUITY TO GUARANTEE THEIR OBLIGATION TO YOU. ALTHOUGH YOU ARE THE IRREVOCABLE BENEFICIARY, YOU DON’T OWN THE ANNUITY. Don’t forget your assignment. 08/24/09 [email_address]

13. 10 YEAR DEFERRAL INTERNAL RATE OF RETURN = 4.89% IMMEDIATE PAYMENT (NO DEFERRAL) = 3.88% DISCLAIMER: EXAMPLES ARE FOR ILLUSTRATIVE PURPOSES ONLY. EACH CASE WILL BE DIFFERENT AND IS IMPACTED BY AGE, GENDER, DEFERRAL PERIOD, COMPANY RATING, TAX BRACKET AND INSURANCE RATES AT TIME OF PURCHASE. So what are these fee structures returning? 08/24/09 [email_address]

14. USE STRUCTURED FEES TO FUND A DEFINED CONTRIBUTION PLAN (401K, SEP, ETC.). DEFER FEES TO COVER YOUR OVERHEAD (OFFICE, SUPPORT STAFF, ETC.)> FUND YOUR KEY EMPLOYEE INSURANCE PREMIUMS. STRUCTURE EVERY YEAR AND BE HAPPY, OLD AND GREEN. “ Crazy” ideas. 08/24/09 [email_address]

15. [email_address] Questions? 08/24/09 [email_address]