Qualified Settlement Funds (QSF) - (sometimes called 468B trusts, qualified settlement trusts, qualified settlement accounts, QSF accounts, or even QSF trusts) - this powerful tool allows attorneys to reduce risks and efficiently manage the distribution of settlement proceeds – even for smaller settlements.
Here are the reasons why attorneys should consider using a Qualified Settlement Fund, even for smaller settlements:
1. Preservation of Tax Benefits - QSFs offer significant tax advantages. By placing settlement funds in a QSF, the defendant can take a current-year tax deduction, and plaintiffs can defer income recognition until they receive their settlement.
2. Earned Interest for Clients - Unlike IOLTA accounts, where interest benefits the state, funds in a qualified settlement fund earn interest for the client, maximizing their financial benefits from the settlement.
3. Time to Plan Financial Decisions - A QSF provides clients valuable time to make informed financial decisions, such as opting for structured settlement annuities or setting up special needs trusts, without the pressure of immediate fund distribution.
4. Efficient Lien Resolution - QSFs allow time to resolve liens, bankruptcy, and probate issues, ensuring clients receive their settlement funds free from potential disruptions and financial penalties.
5. Avoiding Constructive Receipt - By using a QSF, attorneys can avoid the constructive receipt of funds, which can have tax implications for plaintiffs.
6. Avoiding Economic Benefit - By using a QSF, attorneys can avoid triggering the economic benefit of funds, which otherwise would result in taxation for plaintiffs.
7. Protection Against Defendant Insolvency - A QSF protects plaintiffs from the risk of defendant insolvency by securing settlement funds in advance and ensures that clients receive due compensation regardless of the defendant's financial status.
8. Flexibility - QSFs offer a flexible framework for distributing settlement proceeds, accommodating various client needs and preferences for financial planning.
9. Enhanced Compliance with Legal and Ethical Standards - By utilizing a QSF, attorneys can ensure compliance with legal and ethical standards, particularly in handling significant settlement amounts, which helps to safeguard client interests.
10. Streamlined Settlement Process - QSFs streamline the settlement process by allowing for the efficient allocation and management of settlement funds, reducing administrative burdens on attorneys, and ensuring a smoother experience for clients.
11. Online Quick, Easy, and Low Cost – Online solutions like QSF 360 provide accessible and low-cost qualified settlement fund solutions in as little as one day.
In summary, qualified settlement funds provide numerous benefits that can significantly enhance the settlement management process for attorneys and their clients, even in cases involving smaller settlements. By leveraging the advantages of QSFs, attorneys can offer their clients better financial outcomes and peace of mind.
Eastern Point Trust Company se complace en ofrecer a los clientes de habla hispana un número gratuito exclusivo, así como acceso a un equipo de servicios al cliente compuesto por personal hispanohablante nativo profesional y de alto nivel.
Para obtener más información, comuníquese con el equipo al (855) 412-5100, esperamos trabajar con usted.
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