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Litigation continues to grow increasingly complex, especially catastrophic litigation and cases involving multiple plaintiffs. That’s why the legal profession is committed to removing obstacles to settlement and the challenges to collecting a settlement.

what is a qualified settlement fund

One straightforward settlement planning tool is the qualified settlement fund (QSF). Simply put, a QSF is a trust that holds settlement funds after the defendant in a lawsuit settles the case and before the plaintiff receives his or her money.

There are three big benefits of establishing a QSF:

  • It will extend the amount of time available to plan for the incoming settlement money, allowing attorneys to provide thorough client counseling and address the decisions involved in the disbursement of funds.
  • A QSF will allow the defendants to make a payment into the fund in exchange for a general release from the litigation.
  • Lawyers can receive their fees months sooner.

Setting up a QSF requires an administrator, an escrow agreement, and a court order. The law firm of record establishes an escrow or trust agreement with a professional fund administrator, which sets the stage for the litigating parties to understand their respective roles.

Typically, defendants will need to confirm their payment is qualified and therefore deductible, and that they are fully released of all of the claims brought against them and any claim that may arise out of the creation of the QSF. Then, when the QSF is established, the defendants pay the agreed-upon amount into the fund and their involvement ends there.

QSFs are a solution that benefits plaintiffs attorneys, defense counsel, and claimants , and they work for many case types. We at Milestone Consulting compiled a wealth of information into an ebook, titled Qualified Settlement Funds: What Trial Lawyers Need to Know, which is free for download on our website. If you’re an attorney and are interested in exploring a QSF as a settlement planning option, feel free to contact our firm for more information.



About John Bair

John Bair has guided thousands of plaintiffs and attorneys through the settlement process as co-founder of Milestone Consulting, LLC, a broad-based settlement planning and management firm. Milestone’s approach is comprehensive and future-focused. John’s team has guided thousands of clients by taking the time to understand the complexities of each case. They assess the best outcome and find the path that enables each client to manage their many needs. Read more about Milestone Consulting at


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