What is a deferral?

In general, by making a “deferral” election you delay the recognition of taxable income. By making a deferral election under our program, you invest your fees on a pre-tax and tax-deferred basis.

How is a deferral under the Optcapital program different than a structured attorney fee?

Structured Fees require assignment of a fee to an offshore assignment company. This requires cooperation by defense counsel, and limits deferral to larger cases. Structured Fees also require you to designate the term of the deferral (i.e. invest for 10 years, and then pay out over 5 years.) Lastly, Structured Fees generally have limitations on how funds are invested.

Optcapital’s deferral program does not require an assignment, involvement of defense counsel or use of an offshore company. The program is 100% based in the United States. Your deferred fees are invested with your financial advisor.

What is the cost?

There are no upfront fees or implementation costs. Once you have deferred fees into the plan, the cost is 1% per year of the account balance.

How do I make a deferral?

Prior to earning a fee, you execute a deferral agreement which identifies the specific case and the amount you wish to defer. You can specify a dollar amount, a percentage, or a combination. When the case is settled, the fee is paid to your Optcapital account, rather than to your firm’s operating account. Thereafter, your account is invested on a tax-deferred basis.

What is the minimum deferral?

There is no minimum.

How do I withdraw money?

You make an election on Optcapital’s administration platform (“Optlink®”) indicating the amount and timing of what you would like to withdraw. You can withdraw up to 5% of your total balance each quarter.

Keep in mind that Optcapital offers Lines of Credit, which allow you access to funds on an as-needed basis.

May I close my account?

You may transfer your account to another provider at any time. You can also elect to withdraw all your funds, which would take 24 quarters.

What happens if I die?

The amount in your deferral account is treated as Income in Respect of a Decedent (IRD). Your heirs “stand-in-your-shoes” – with all the same rights and privileges you have and can continue the deferral for as long as they wish.

Who can participate?

Attorneys with contingent legal fees.

Has the IRS audited you or your clients?

Yes, we were audited in 2008, without issue.

Yes, several clients have been audited over the past 20 years, all without issue.

How do I get started?