Plaintiff Recovery Trust

Help Your Clients Keep More of Their Settlement

Avoid the Attorney Fee Double Tax

Every taxable settlement today triggers a second tax the plaintiff never sees coming. They are taxed not only on their net recovery, but also on the portion paid to their attorney — a permanent consequence of recent tax code changes.

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Maximize Your Settlement Avoid Double Taxation with Plaintiff Recovery Trust

Reducing Taxes in Taxable Cases

The Recovery Trust is based on a commonly used estate planning arrangement. Formal tax opinions are available for a minimal fee from a firm of 1,000+ advisors.

Avoid Unnecessary Taxes

Download the Recovery Trust brochure to learn more about the problem, the solution, and next steps.

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The Problem Most Plaintiffs Never Hear About

The Attorney Fee Double Tax

In taxable settlements, the IRS taxes the plaintiff on the entire recovery — including the portion paid directly to counsel. That means a plaintiff who is awarded $1,000,000 and receives $600,000 after fees is taxed as if they received the full million.

They never see $400,000.
But they pay tax as though they did.

Why This Matters

This is not academic.
This is not hypothetical.
This is every taxable settlement in the modern era.

A Permanent Problem

Post-Tax Cuts and Jobs Act, deductions for attorney fees in taxable settlements are severely restricted or eliminated. Plaintiffs cannot deduct fees. Plaintiffs are taxed on dollars they never keep.

Most lawyers are not aware of this. Most plaintiffs learn too late.

The Solution — Plaintiff Recovery Trust

The only trust structure designed to prevent the double-taxation of attorney fees.

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You can win the case.
PRT helps you keep the value.

EPTC developed and administers the Plaintiff Recovery Trust, a purpose-built structure allowing plaintiffs to avoid the double tax and significantly increase net recovery in taxable settlements.

Without PRT → Double taxation is triggered.
With PRT → The plaintiff is taxed only on what they actually receive.

ILUSTRATIVE EXAMPLE

Case & Plaintiff Tax Details

TAXABLE RECOVERY

$1.0M

ATTORNEY FEE

40%

INCOME TAX

40%

Plaintiff Net Proceeds After Tax

Estimated after-tax cash to the plaintiff, net of attorney fee, taxes, and the PRT Charitable Contribution.

$400K $300K $200K $100K $0

$200K

Without PRT

$360K

With PRT

PRT Net Increase in Proceeds

Net Dollar Increase $160,000

Net Percentage Increase 80.0%

Illustrative only, based on a $1,000,000 taxable recovery, a 40% contingency attorney fee, and a 40% combined income tax rate. PRT cost modeled at a fixed 3% of the taxable recovery ($5,000 minimum). Not tax advice; actual results depend on individual facts. See the full PRT Calculator for a detailed estimate.

How It Works

Simple, Powerful, Court-Friendly.

PROCESS

The Steps

A plaintiff, their attorney, and the PRT team move through the same six stages on every case.

1

Intake

The plaintiff and attorney meet with the PRT team to confirm the potential benefit for the case and answer any questions.

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2

PRT Creation

The PRT is created and the claim is contributed to the trust, with the plaintiff and attorney signing the PRT creation documents. This happens while the case outcome is still uncertain — "contingent and doubtful."

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3

Litigation

The attorney continues prosecuting the case under the same fee agreement and terms, with the trust joining as a co-client. Nothing about case strategy changes.

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4

Case Resolution

As the case resolves, the PRT team works with the attorney to ensure the settlement agreement includes the appropriate PRT language, and a distribution schedule is prepared.

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5

Distribution

Following the approved distribution schedule, attorney fees and any liens or costs are paid, and a 3% charitable contribution is made on the double-taxed portion. The remainder is paid out as a trust distribution, and the plaintiff receives a K-1.

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6

Completion

Once the PRT has distributed all funds, it has served its purpose and comes to a close, unless the plaintiff chooses to continue it.

Flow of Funds

How the Recovery Is Routed

This structure is designed to avoid double taxation: the trust, rather than the plaintiff, owns the claim and receives the recovery. As a result, taxation applies only to the net recovery ultimately distributed to the plaintiff

Defendant

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Plaintiff Recovery Trust

Owns the claim & receives the recovery

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The trust pays, then distributes

Attorney Fees & Costs

Paid directly by the trust

Charitable Contribution

3% of the taxable recovery, or $5,000 min per plaintiff

Plaintiff

Net recovery — only taxed on this portion

A PRT can be used alongside a Qualified Settlement Fund or a structured settlement annuity. Because timing matters, this should be coordinated with counsel early in the case.

Numbers Speak Louder Than Theory

We saved the claimant over 7 figures in federal tax liability by avoiding taxation on the attorney fee portion alone.

Case Type	Recovery	Expected Tax (No PRT)	Actual Tax (With PRT)	Savings
Securities Fraud	$3.5M	$1.2M	$650K	$550K Saved
Contract/Business Tort	$900K	$315K	$172K	$143K Saved
Punitive + Interest	$12M	$4.4M	$2.1M	$2.3M Saved

*Illustrative Example

Plaintiff Recovery Trust Ideal For:

Taxable settlements (business torts, discrimination, fraud, defamation, employment, IP, etc.)

Cases involving punitive damages & pre/post-judgment interest

Large fee cases where fee allocation dramatically affects tax liability

Any situation where taxation applies to plaintiff recovery

Why Us

Plaintiff Recovery Trust - The Only Solution.

EPTC is the only fiduciary that has:

Solved the attorney-fee double taxation problem

Structured hundreds of taxable settlements with net-recovery protection

Industry leadership + national visibility + expert trust administration

Twenty-plus years as a pure-play fiduciary (not a broker, not a product seller)

Advisors, Planners & Brokers

Advisors, planners, and brokers are critical to informing plaintiffs about arrangements like the Recovery Trust. Up to 10% of the PRT Cost is available to compensate eligible professionals for their services. Thank you to those who have already helped their clients avoid unnecessary taxation.

“Every trial lawyer should know about this. It dramatically reduces client taxes.”

Smiling woman with straight blonde hair wearing a beige blazer against a neutral background.

Paula Elliot

Trial Lawyer

“This saved my client millions. I’d absolutely recommend that plaintiff lawyers consider it. Using the trust was easy and the team was incredibly helpful.”