Attorney’s fees to produce taxable income are deductible. Since part of the disability payments is included in gross income, part of the attorney’s fees is deductible. However, you treat them as a miscellaneous itemized deduction, which means:
You’ll have to run the numbers to see whether you actually get any tax benefit from deducting attorney’s fees.
The legal transfer of property, rights, or interest to another person called an assignee. You cannot avoid tax on income by assigning the income to another person.