Given the number of the post-settlement concerns that must be addressed by both plaintiffs and defendants, engaging in legal settlements is becoming increasingly more complex.
Attorneys must constantly be aware of the increasing obligations being placed on both them and their clients. In order to satisfy these obligations, a settlement must not only be advantageous to both the plaintiff and defendant but also must satisfy any subrogated interests or reimbursement claims.
Congress has provided a mechanism that helps simplify the settlement process for all parties involved in litigation: the Qualified Settlement Fund (QSF). A QSF, if used properly, can be a tool that allows all interested parties to benefit from its use, making it a vital settlement instrument.
Advantages of Qualified Settlement Funds
Advantages for Plaintiffs
Obtain breathing space and time to fully consider the proper form of their settlement proceeds
Benefit from the interest earned on settlement proceeds (unlike interest in an IOLTA account)
Avoid constructive receipt of the settlement funds, which allows for Medicare, Medicaid, and private health liens that may exist to be verified and resolved
Determine whether a special needs trust is appropriate and whether any amount of the proceeds should to be placed into a Medicare Set Aside
Obtain a settlement that, upon payment into the QSF, is not subject to the defendant’s creditors, which is a particular advantage if the defendant or the defendant’s insurers are financially unstable
Advantages for Defendants
Disengage from the litigation and qualify for economic performance
Receive a full release of all claims and liability that arise from a specific cause of action, and receive dismissal with prejudice pursuant to a court order
Qualify for a current year tax deduction for the payment made into the QSF
Reduce legal costs and free up resources previously tied to the litigation because the defendant is released from the cause of action
Settle with multiple defendants in a single check
Advantages for Attorneys
Evaluate the client’s needs based benefits and avoid any associated liability for failing to inform a client about how settlement proceeds can affect those benefits
Avoid constructive receipt of the funds placed in the QSF, which allows the attorneys to structure their fees
Receive payment for attorney’s fees and other expenses immediately upon presentation of the applicable contingency fee agreement between plaintiff and the attorney.
Why Choose Us?
We provide comprehensive QSF administration. Our team of attorneys understands and handles all the different issues that need to be addressed when administering a QSF: government benefits planning, tax planning and strategies, and other related areas.
Our attorneys’ legal and financial experience and education allow us to provide truly comprehensive QSF administration. Contact us today and we’ll help you determine if a QSF is suitable and advantageous for your case.
Qualified Settlement Fund Services
Comprehensive QSF Administration
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