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Qualified Settlement Fund
Qualified Settlement Fund (QSF) Administration & Setup Services
History of Qualified Settlement Funds | Section 468B Background
What Is a Qualified Settlement Fund (QSF)? | IRS Section 468B Explained
QSF Administration Checklist & Pitfalls | Choosing the Right QSF Provider & Administrator

 Benefits of Qualified Settlement Funds (QSFs) for Attorneys, Plaintiffs & Defendants
QSF Best Practices | Compliance, Reporting, Timing & Strategic Setup

Plaintiff Recovery Trust
Qualified Settlement Fund
Qualified Settlement Fund (QSF) Administration & Setup Services
History of Qualified Settlement Funds | Section 468B Background
What Is a Qualified Settlement Fund (QSF)? | IRS Section 468B Explained
QSF Administration Checklist & Pitfalls | Choosing the Right QSF Provider & Administrator

 Benefits of Qualified Settlement Funds (QSFs) for Attorneys, Plaintiffs & Defendants
QSF Best Practices | Compliance, Reporting, Timing & Strategic Setup

Plaintiff Recovery Trust
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Qualified Settlement Fund (QSF) Administration & Setup Services

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Explore the advantages of Qualified Settlement Funds (QSFs) in legal settlements with Eastern Point. Learn how QSFs under IRC Section 468B can reduce liability for law firms, ease administrative burdens, and provide critical tax benefits for clients.

What Is a Qualified Settlement Fund (QSF)?

Qualified Settlement Fund (QSF)

A Qualified Settlement Fund established under IRC § 1.468B-1 as a 468B Trust, is a statutory trust that covers a wide range of litigation types, from large and complex cases to single event and single plaintiff cases. A QSF, sometimes referred to as a qualified  settlement trust, qualified settlement fund trust, QSF account, QSF trust, or 468B trust, preserves tax advantages and provides tax deferral and the benefit of extra planning time.

A QSF holds the proceeds of a judicial award or settlement. The defendant’s obligations are held in the QSF until claimants become eligible for a disbursement. Law firms of all sizes utilize QSFs in cases involving multiple plaintiffs arising from an event or related series of events and in single-plaintiff matters.

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Who Is Utilizing Qualified Settlement Funds (QSFs)

For the Plaintiff

Plaintiffs gain the advantages of extra time to conduct financial planning and tax deferral while the funds are in the QSF, as well as the preservation of beneficial tax options that may otherwise be lost.

For the Defendant

With a QSF, the defendant is afforded an immediate tax deduction and extracts themselves from the post-settlement and settlement administration process.

For the Attorney

Attorneys benefit from reduced settlement administration, reduced risks by not having the funds in the firm’s IOLTA, and tax and financial planning benefits for themselves.

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The Evolution of Qualified Settlement Funds

The need for Qualified Settlement Funds  emerged in the 1980s. Insurance companies grew anxious that settlements made with an entity (or directly to an individual) would not qualify for immediate tax deductions. They lobbied Congress for the ability to deduct payments in the year of the settlement, instead of when the payments were distributed. Congress acted in 1986 by enacting Section 468B of the Internal Revenue Code, a Qualified Settlement Fund and 468B allows the defendant to receive an immediate tax deduction.
With a QSF a defendant can transfer settlement funds, receive a current-year tax deduction, and obtain a release of claims. Also, plaintiffs may finalize the settlement terms without tax implications until the funds from the Qualified Settlement Fund are dispersed. This framework allows the QSF administrator to determine the allocation among the claimants.
While Section 468B initially focused on designated settlement funds, it was later amended by Congress to grant the Treasury powers to develop regulations. Qualified Settlement Fund accounts were thus born by regulation.
It is worth noting that in the past some insurance companies and large self-insured businesses have opposed the implementation of QSFs. However, numerous recent favorable court cases stipulating using QSFs have made such objections moot.
To qualify a QSF must be established pursuant to an order from, or approval by, a governmental authority. Additionally, it must settle one or more disputed or undisputed claims, asserting at least one liability. All claims must stem from an event or a related series of events. Unrelated events are not allowed. Finally, the QSF must be created as a trust under state laws or the assets are segregated from those of the transfer and related parties.
QSFs have provided many tax and other financial advantages for the defendant and the plaintiff for decades. To access more educational content on QSFs and various other trust products, check our articles.
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QSF Administration Checklist and Pitfalls When Selecting a Provider

Selecting a Qualified Settlement Fund administrator is a critical decision that directly impacts tax compliance, distribution timing, claimant outcomes, and professional liability exposure. While IRC Section 468B and the Treasury Regulations define what a QSF is, they do not regulate who may administer one or how administration is performed.
As a result, QSF providers vary widely in oversight, experience, independence, and operational rigor.
This page provides a practical due diligence framework for attorneys and settlement professionals, including ethical considerations, compliance checkpoints, and common pitfalls to avoid when selecting a QSF administrator.
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QSF Best Practices

Compliance, Reporting, Timing and Strategic Setup.
Best Practices for Managing and Strategically Establishing a Qualified Settlement Fund
Qualified Settlement Funds are powerful tools for resolving complex settlements, but their effectiveness depends on how and when they are established, administered, and communicated to all parties involved. While the governing regulations under IRC Section 468B provide the legal framework, they leave significant discretion to practitioners in how QSFs are implemented in practice.

This page outlines best practices for establishing and managing QSFs to ensure compliance, clarity, efficiency, and strategic alignment with court processes and opposing counsel.
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When should a QSF be established in the settlement process?

Ideally before settlement funds are paid and as soon as it is clear a QSF will be used.

Does every settlement require the same QSF structure?

No. The structure should be tailored to the complexity and objectives of the case.

Why does administrator experience matter so much?

Experienced administrators anticipate issues, streamline workflows, and reduce risk for all parties.

Qualified Settlement Funds are most effective when they are established thoughtfully, administered professionally, and coordinated strategically. Following best practices ensures compliance while maximizing efficiency and protecting client outcomes.
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Real-World Qualified Settlement Fund Examples

EPTC has administered QSFs for some of the most recognized cases in U.S. history and globally. We've handled all or a portion of the following QSFs listed.

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