#MeToo Settlement Planning
With the rise of the #MeToo movement, civil law suits centered around issues of sexual assault are being filed everyday. Milestone does everything we can as a company to push the #MeToo movement forward. We ensure sexual assault survivors receive the biggest beneficial impact possible from their settlements/verdicts. Milestone can give survivors and attorneys an opportunity for a brighter future through the use of different financial instruments.
Qualified settlement funds are particularly important for sexual assault litigation, given that it often takes place within strict statutory windows, and cases may settle in batches. Attorneys can see larger fees and increased income over a short period, resulting in a sudden increase in tax burden. By placing the settlement monies in a QSF, attorneys are able to gain 100% income recognition and choose whether or not to defer accepting their fees as income.
When participating in an attorney fee deferral, attorneys can spread their income from a “big year” over years or even decades. In the meantime, the fees are able to grow in a personalized wealth management account. Instead of paying a high tax rate, attorneys can let their money grow and stretch their tax burden over decades. Payment schedules are flexible, and investment options are near limitless.
Even with attorneys benefiting greatly from QSFs, clients benefit even more – especially survivors. QSFs give clients as much time as they need to explore their financial options and plan out their future. Maybe they need to open a personalized wealth management account, or they want to purchase a home. Maybe they want to engage in a spend down and protect their needs-based government benefits. The important thing is, with the qualified settlement fund, clients have time to become educated consumers.
Many survivors are young and do not have an immediate need for their settlement dollars. For those individuals, there is an option to grow their funds tax-free, in a personalized wealth management account. By utilizing an equity-backed structure, a client can grow their funds tax-free for years or even decades, receiving the benefit of not only their settlement, but also the tax-free growth of their settlement.
We recently worked with a 23-year-old survivor who placed her funds in a QSF. This woman has a good career and does not have an immediate need for all of her settlement money. She is placing nearly $1 million in an equity-backed structure, scheduling payouts for a wedding when she turns 26, a first home when she turns 29, and then letting the rest grow until a planned early retirement at age 50. While her attorneys fought hard for her settlement, our planning will allow her settlement to positively impact the rest of her life. (She is also planning a six-figure contribution to a non-profit that helps other survivors.)
The impact we are able to have on people’s lives is real. We are able to approach tragedy, appreciate loss, focus on an unimaginable future, and open doors never before seen.