- The lawsuit proceeds, including amounts owed to the attorney, are transferred as per the settlement agreement.
- The proceeds are held until a structured legal fee design is selected.
- Attorney funds are then transferred to the assignment company, with the agreement that periodic payments will be made to the attorney.
- The assignment company will fund this payment obligation by purchasing an annuity contract from the participating insurance company.
- Our parent company, Pinnacle Bank, a Tennessee state-chartered bank and wholly owned subsidiary of Pinnacle Financial Partners, Inc., may lend the attorney an amount that can be fully repaid with interest using the guaranteed portion of the annuity payments.*
- The attorney will agree to an irrevocable assignment of the annuity payments to the assignment company, with binding instructions to pay the guaranteed portion of each periodic payment to the participating bank to satisfy debt service obligations.
- Any excess earnings credited from the annuity payments can be paid directly to the attorney.
- The loan repayment structure from the participating bank will mirror the annuity payment stream, thereby creating an automatic loan repayment.
- Loan to value ratio for auto approval would be capped at 70% of the total annuity premium.
Per an opinion available upon request, the attorney will not incur current income tax on the full amount of the deferred fee. Instead, they will report the annual income benefits from the annuity contract as ordinary income only in the years in which they are received.
The tax liability can be spread over the duration of the structured legal fee contract, allowing the attorney to use tax strategies, and planning in the future while putting more funds to work in their practice now.
Contact us to Get Started
If you have any questions or would like to get started with our Legal Fee Lending Solutions program, click here to contact us or call our toll-free number 1.877.894.9724.
*All loans subject to credit approval.
