Those 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 settlement funds should be strongly considered. A qualified settlement fund (QSF) is a settlement procedure that provides 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. This method gives attorneys the time they need to thoughtfully address the myriad of decisions involved in the disbursement of funds.
Of primary importance, a QSF alleviates a defendant’s participation in the post-settlement disbursement process. Not having to involve defendants in Medicare or Medicare set-aside variables saves time and reduces confusion for plaintiffs’ attorneys. Seasoned defense attorneys appreciate how the laws regulating QSFs terminate their client’s liability and provide a current-year tax deduction. Moreover, because the litigation process ceases for the defendant once payment is made into the QSF, litigation costs decrease and human capital can be allocated elsewhere.
When utilizing a QSF, plaintiffs’ attorneys can be paid more quickly, something of significant importance after a lengthy and expensive litigation. Attorneys are able to take their fees almost immediately upon the defendant’s payment to the fund, which generally speeds up payment by 30 to 180 days. In addition to expedited reimbursements, attorneys become eligible for tax deferrals.
Another perk of the QSF is appointing an administrator, who is an invaluable asset to the litigating parties. An expert administrator will be well-versed in all aspects of the QSF. Areas of expertise include full accounting of the fund, attorney fees, attorney tax deferral options, claimant payouts (including special needs trusts and structured settlements when needed), and lien negotiations. When defendants make a payment to the fund, the monies are essentially “parked” in the trust temporarily, allowing the administrator to plan disbursement in an organized manner. Allowing for an administrator’s assistance with the daunting number of responsibilities involved in settlement can help take pressure off of attorneys. For one, the lawyers involved do not need to be fluent in the process. An administrator also provides clients with the best expert-guided planning.
Qualified settlement funds can provide enormous advantages during the settlement process. However, finding the proper administrator is pivotal. Be sure to work with one who has the breadth of experience required to understand the many facets of the settlement process and can therefore be the partner you need.
About John Bair
John Bair has guided thousands of plaintiffs through the settlement process as 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 http://milestoneseventh.com/.
A West Point graduate where he served as captain and military aviator, John Bair continues his commitment to our country through his efforts within the settlement planning industry. He has represented families of victims lost in the Flight 3407 crash, offered pro bono services to the families of 9/11 victims and drafted the first consumer protection bill for plaintiffs (H.R. 3699).