Attorney Rob Wood's recent article in the LosAngeles Daily Journal explains why qualified settlement funds can be an invaluable time-saver for lawyers and, as the headline says, "their time has come."
"Whatever you choose to call it, a qualified settlement fund, called a QSF or a Section 468B trust, is a flexible dispute-resolution mechanism whose time has come. QSFs are enabled by Section 468B of the Internal Revenue Code, which was enacted in 1986, but they really didn’t exist until 1993, when the IRS published regulations detailing their operation. They’ve really taken off only in the last few years. In essence, a QSF allows for a tax-free way-station. It is a simple trust that serves as a stopping point after one or more defendants pay money to settle a case but before the plaintiffs receive it."
As you know, The Settlement Channel has done a lot of commentary and education on this topic. I firmly believe the qualified settlement fund, or 468B trust, should be used in the vast majority of all multi-claimant cases. Until recently, the two major obstacles to the growth and widespread application of this remarkably useful planning tool have been: (1) needless objections by defense brokers who fear loss of their ability to structure settlements; and (2) the excessive expense of some lawyers and trustees in putting these in place.
These dual roadblocks -- defense broker paranoia and greed by the gatekeepers and trustees -- are finally being eroded through the use of quality corporate trustees who know and understand this business, together with widespread education on how brokers work cooperatively while still using a 468B Trust. In my opinion, QSFs are the single most important tool to increase the sale and use of structured settlements and settlement planning over the next decade.
Check out the article and Rob's appearance on Speaking of Justice last week to discuss qualified settlement funds.