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A qualified settlement fund, or QSF, is a settlement escrow account created in accordance with state law to hold settlement proceeds past the conclusion of a case. The account affords plaintiffs more time to plan and address any settlement issues with their attorneys.

QSFs work well with case types such as:

  • Single event or traditional individual lawsuits
  • Personal injury
  • Medical malpractice
  • Product liability
  • Employment discrimination
  • Sexual assault and harassment
  • Patent and intellectual property

QSFs benefit all three key players in a lawsuit: the plaintiff, his or her attorney, and the defendant. After the account is established, the defendant can pay cash and get a general release from the litigation. That way, the pressure is off the plaintiff and attorney to quickly wrap up the planning process.

What’s the point in delaying payment of the plaintiff’s settlement through the implementation of a QSF? First, a QSF allows for adequate time to fully address liens and other settlement issues. Then, there is more time to speak with a settlement expert about planning for the future. Together, they may decide to utilize tools such as:

  • Special needs trust to preserve needs-based government benefits
  • Medicare set-aside to comply with Medicare secondary payer rules
  • Tax-free periodic payments instead of receiving the settlement in a lump sum

QSFs are a common-day settlement management tool that relieves the pressure that plaintiffs and their attorneys can experience when resolving their case. If you are interested in setting up a QSF for your client, we welcome you to give Milestone a call.

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