How Do Qualified Settlement Funds Resolve Multi-Claimant Lawsuits More Efficiently?
Lawsuits involving multiple claimants require significant coordination. Attorneys must grapple with many issues, including outstanding liens, pending bankruptcies and probate issues, presenting structured settlement options, and preserving claimants’ government benefits. A Qualified Settlement Fund can help to streamline the settlement process as attorneys work through these issues and more.
What is a Qualified Settlement Fund?
A Qualified Settlement Fund (QSF), also known as a 468B Trust, is established to hold settlement funds until the appropriate time for disbursement. The defendant(s) pays the settlement funds directly to the QSF in exchange for a full release of all claims. A QSF offers time to ensure proper allocations, resolve individual issues, and determine how each claimant wants to receive funds.
What are the Requirements for Establishing a Qualified Settlement Fund?
Several conditions must be met when creating a QSF:
- The QSF must be established under a court order or by order of a government authority
- The establishment of the QSF must resolve or satisfy one or more contested or uncontested claims asserting specific types of liability
- The QSF must qualify as a trust under state law
What are the Benefits of a Qualified Settlement Fund?
A QSF offers many benefits for claimants and defendants:
Benefits for Claimants:
- Additional time for ensuring correct allocations
- Time to resolve liens, bankruptcies, probate, government benefits, and other outstanding issues
- Opportunity to meet with a settlement consultant and create an individualized plan that may include structured settlement annuities, market-based structured settlements, or a range of other options
- Funds the settlement while avoiding constructive receipt
- Interest is earned on the money while it is held in the QSF
Benefits for the Defendant(s):
- Full release from liability once the QSF is funded
- Immediate tax deduction (rather than waiting for individual claimant issues to be resolved before disbursement)
Contact Sage for Qualified Settlement Fund Assistance
For more information about resolving multi-claimant cases with a Qualified Settlement Fund, contact your Sage consultant today.