Jeremy Babener · Scott Bethune

An extra sentence in the settlement agreement can dramatically increase what a plaintiff keeps. Even in tax-free cases you can save your client from significant taxes – for example, by preserving millions in future medical expenses deductions, or by securing valuable tax subsidies.

This is a presentation for trial lawyers, not financial advisors. How can you issue-spot for tax opportunities (and risks) at settlement? And what steps can you take at engagement to protect you and your client from missing them?

The settlement agreement is your best tax tool. You can force the IRS to bear the burden of proof on audit. You can dramatically reduce the risk of audit. And you can memorialize facts needed to secure tax benefits.

To do so we’ll discuss how to spot potential taxation before signing and flag opportunities to avoid it. We walk through the use of the settlement agreement to effect and protect tax-saving strategies.

We’ll also walk through tax-subsidized and tax-advantaged arrangements. Each “solution” solves a unique problem. What is the “plaintiff double tax”? How can you avoid it? How can you settle while still preserving structured settlement options?

Lastly, we’ll cover the plaintiff firm’s ethical obligations on tax and financial issues. What if you don’t spot these issues? Can you exclude them from your scope of representation? What should you know when referring clients to settlement advisors?

No one expects you to become a tax lawyer. But your team may be in the best position to spot tax opportunities and risks. We’ll walk through what to watch for.