Qualified Settlement Fund Administrators
Qualified Settlement Funds
As litigation continues to grow increasingly complex, so too has collecting and distributing settlements once the litigation has ended. A straightforward and efficient tool for attorneys and plaintiffs alike is the qualified settlement fund (QSF). Our qualified settlement fund administrators and planners can help with the initial establishment of the qualified settlement fund and/or its management once it is established. Contact us today for expert qualified settlement fund services, consulting, and administration.download pdf
How Does This Work?
A qualified settlement fund is a tax-qualified trust or account that holds settlement proceeds from litigation. This tool allows for more simplified and organized administration of a settlement, and everyone benefits from implementing a qualified settlement fund – the defendant, the plaintiff, and the plaintiff’s attorney.
A qualified settlement fund is helpful to a plaintiff because it gives their attorney sufficient time for proper client counseling before, during, and after settlement, by extending the amount of time available to plan past the release of the defendants from the litigation. Attorneys can thoughtfully address the myriad of decisions involved in the disbursement of funds, and plaintiffs can take consideration of how they would like to receive and/or manage their settlement money.
For defendants, an important element of a qualified settlement fund is that it can remove them and their insurers from decisions that must be made post settlement. The qualified settlement fund allows for the defendants to pay cash into the fund in exchange for a general release.
And here’s the critical part for lawyers: while the money is held in a qualified settlement fund, they have the chance to plan what they would like to do with their attorney fees. Contingency fee attorneys can choose to take their fees immediately – and doing so can improve cash flow of fees by 30 to 180 days, depending on court approval or other challenging issues. Or, they can choose to defer their attorney fees, creating a structure for their attorney fees which provides tax advantages and long-term wealth accumulation, and better personal and professional financial planning.
Milestone Consulting can work with trial attorneys and their clients to establish a qualified settlement fund, and their team of experts can help administer a qualified settlement fund as well. In cases of class action or mass tort litigation, this tool is handy because it helps organize money owed to multiple plaintiffs. Milestone’s qualified settlement fund administrators are adept at ensuring all appropriate parties involved in a class action or mass tort case receive their fees, that the money is disbursed safely and in a timely manner, and that all necessary documentation is in order.
What Are the Benefits?
Establishing a qualified settlement fund has benefits other than the time of payment and fee. You are also hiring a professional qualified settlement fund administrator to manage the funds and ongoing claim resolution, to source lien negotiators, and to assist in the evaluation and necessity (or lack thereof) for Medicare set-asides. And, if you have a lengthy court approval process due to a wrongful death or multiple plaintiff litigation, the consolidation of the cases in a single jurisdiction can be invaluable.
Other benefits include:
- Control over recognition of income
- Tax planning at year end for both plaintiff and attorney
- Ability to spread taxable income over many years
- Potential for tax deferred growth
- Ability to earn pre-tax income, or tax-exempt earnings
Lawyers who dedicate their career to mass tort litigation know all too well how complex the settlement process can be. After months or even years of litigation, any process that can help streamline and improve the disbursement of funds should be strongly considered. Utilizing Milestone Consulting’s Qualified Settlement Fund services is a great solution for all parties involved.