Qualified Settlement Funds are a Powerful Tool

Once thought to be restricted to the settlement of mass torts, the use of an Internal Revenue Code Section 468B Qualified Settlement Fund (QSF) for smaller, multi-claimant settlements is now firmly recognized as a powerful weapon in the plaintiff attorney’s arsenal.

A QSF allows the plaintiffs to settle and release the defendants in exchange for their lump sum payment. Then once the monies have been paid into the QSF and releases have been executed, the plaintiff attorney can petition the QSF Trustee for the distribution of funds including the purchase of structured settlement annuities.

There are some restrictions on the use of QSF’s and the defense may attempt to mount a challenge to the use of a QSF. As such, you will need to contact your plaintiff structured settlement broker before settlement negotiations commence to develop a strategy for preserving this powerful weapon