Discover the power of Qualified Settlement Funds (QSFs) with our comprehensive guide. Learn about their purpose, benefits, eligibility, tax implications, QSF administration, etc. Perfect for parties involved in complex disputes seeking effective settlement solutions.
Qualified Settlement Funds (QSFs) are powerful financial tools to administer settlements, especially in complex matters. Parties involved in disputes contemplated under § 1.468B-1 et seq. can effectively manage and benefit from Qualified Settlement Funds’ tax and financial advantages.
Here are 12 details on QSFs and their operational features you should know.
What is a QSF? A Qualified Settlement Fund (QSF), also known as a 468B Trust, is a statutory mechanism that simplifies the handling and distribution of settlement funds. QSFs enable plaintiffs to postpone tax payments and ensure an organized settlement procedure.
Purpose: QSFs aid in streamlining settlement processes by consolidating payments into a fund allocated to claimants.
Eligibility: Any party involved in one or more contested or uncontested claim(s) asserting liability that has resulted or may result from an event or related series of events can establish a QSF provided it satisfies the conditions specified in IRC § 468B and its regulations, including obtaining approval from a “governmental authority.”
Approval Process: To ensure compliance with § 468B, creating a QSF requires approval from a governmental authority.
Creation: Platforms like QSF 360™ provide a quick, easy, and fully compliant solution for creating and administering a QSF.
Immediate Tax Deduction: Defendants can avail themselves of an immediate tax deduction for the payment made into the QSF.
Tax Deferral for Plaintiffs: Plaintiffs benefit from additional time to plan. Funds held in a QSF are tax-deferred until disbursed.
Flexibility: QSFs provide more flexible tax and financial options for the attorneys and claimants.
Tax Treatment: Each QSF has its own Employer Identification Number (EIN) and is taxed only on its modified gross income (excluding the settlement fund transferred into the QSF). The QSF pays taxes only on its investment income – not the settlement proceeds.
Reporting: The QSF administrator is responsible for the tax returns for the QSF and, when applicable, issuing 1099 forms to claimants.
Asset Management: QSF assets are best and typically held in FDIC-insured money market accounts. The resulting interest covers administrative costs or increases the fund’s value for the claimants.
Treasury Management: Treasury management, daily account reconciliation, and transparent reporting are essential.
Administrator’s Duties: The QSF administrator oversees the fund’s operations, including recordkeeping, reporting, compliance with regulations, and distribution to claimants or lien holders on the claimant’s behalf.
Critical Role: The QSF administrator supervises and facilitates making timely distributions and resolving liens.
Distribution Process: The QSF administrator oversees payments to the claimants, lien satisfaction, and the funding of trusts, assignments, and structured settlements.
Documentation: Proper documentation and releases are necessary for each distribution.
Streamlined Process: QSFs consolidate payments into a single point of contact for all parties involved.
Flexibility: By allowing time for personalized financial planning, plaintiffs have greater flexibility over when and how they receive their portion of the settlement proceeds.
Complex Cases: QSFs are especially beneficial in cases involving post-settlement disputes.
Lien and Secondary-Dispute Resolution: Delays can occur when liens and other outstanding disputes exist. A QSF allows unaffected claimants or lien holders to receive their funds while the impacted parties resolve their issues.
Regulatory Compliance: The QSF administrator must ensure adherence to § 1.468B-1 et seq.
Jurisdiction: All QSFs are subject to the continuing jurisdiction of the approving governmental authority.
Closing the QSF: A final IRS form 1120-SF tax return is filed when all distributions and liens are final and the fund is exhausted.
Reconciliation: The QSF administrator must reconcile and satisfy all the QSF’s tax obligations before closing the fund.
Experienced Professionals: To ensure compliance and maximize QSF benefits, using an experienced QSF administrator like Eastern Point Trust Company is essential.
Ongoing Oversight: Regular monitoring and compliance oversight are necessary to maintain the fund’s integrity and ensure accurate reporting.
Dive into the realm of Qualified Settlement Trusts and Funds. Learn their definitions, uses, benefits, implementation procedures, and real-world implications. Discover how QSFs can transform the settlement process in various legal conflicts.
Shakespeare wrote, ‘What’s in a name?’ In the realm of qualified settlement administration, maybe quite a lot – or nothing at all.
It is essential for legal, settlement, and financial experts to grasp the nuances of Qualified Settlement Funds (QSF). A QSF, also called a 468B fund, serves as a mechanism for parties to settle disputes while reaping tax advantages and benefiting from extra planning time and deferred taxation.
Understanding the principles and uses of QSFs can significantly influence the outcome of settlement talks and the contentment of all parties involved.
This paper explores the realm of Qualified Settlement Funds and their namesake “Qualified Settlement Trusts.” This paper delves into their definitions, practical scenarios, implementation procedures, and real-world implications.
Whether a financial consultant or an involved party, this paper equips you with the knowledge needed to maximize QSF benefits in a settlement agreement.
The answer is - Well, maybe.
When established by a government authority, a Qualified Settlement Fund must meet all the requirements of 26 USC § 468B, et seq., and 26 CFR § 1.468B-1, et seq. It also enables defendants to deposit payments into the QSF trust in exchange for a release of liability.
So, while some may informally call a QSF a Qualified Settlement Trust, the only test that matters is whether the Trust (whatever its name) meets the requirements of 26 USC § 468B, et seq., and § 1.468B-1, et seq. If it does, it is a QSF, no matter what informal label or name is applied to it.
For a Qualified Settlement Trust to be a QSF, it must:
Qualified Settlement Trusts constructed as QSFs prove valuable in resolving legal conflicts.
Some common situations may include:
In these scenarios, QSFs offer advantages such as preventing conflicts of interest for lawyers, allowing plaintiffs to earn interest while disputes are resolved, and freeing defendants from battles while addressing liens and other matters.
Create a trust agreement outlining the QSF rules, detailing how distributions should operate, and setting out the trustee’s duties.
Government approval is required to establish the QSF. The governmental authority that approves the QSF will appoint a trustee to manage it. This approval should clearly define the purpose of the QSF. A proper QSF should also specify the types of claims it aims to resolve.
Once approved, obtaining an Employer Identification Number (EIN) from the Internal Revenue Service for the QSF is imperative.
These practical instances and tens of thousands of other uses highlight how versatile and successful are QSFs are in managing settlements regardless of the number of parties or type of industry.
The inception and application of Qualified Settlement Trusts (properly designed and approved as a Qualified Settlement Fund) can transformed how large and small legal conflicts are settled. By offering a tax-efficient method for handling settlement funds, QSFs streamline distribution processes. The real-world examples underscore QSFs’ role in resolving simple and complex legal battles across diverse sectors.
With the legal environment constantly changing, the significance of Qualified Settlement Trusts as a QSF in resolving disputes is ever-expanding.
Navigating legal claims can be a complex task for businesses. Qualified Settlement Funds (QSFs) offer a practical solution! They provide immediate tax deductions, relieve liabilities, and manage payments, making them a vital tool in dispute resolution.
Qualified Settlement Funds (QSFs), sometimes referred to as 468B trusts or settlement trusts, earn their title from the qualification requirements stipulated in IRC §1.468B-1. Through the relevant regulations, the Internal Revenue Service (IRS) allows QSFs an accelerated method for deducting the expenses associated with settling legal claims. As outlined in IRC §1.468B-1, three conditions must be fulfilled for a fund to qualify as a QSF.
First, a QSF is established through an order or approval issued by a Governmental Authority. Unless transferred, a QSF must remain within the jurisdiction of the approving Governmental Authority. Note that a QSF is not valid without oversight from the Governmental Authority.
Second, the trust must be used to address allowable claims against the defendant. Allowable claims are outlined in §1.468B-1, and include actions based on torts and breaches of contract.
Third and finally, the QSF must adhere to state laws governing the creation of trusts in the state where the QSF is sitused (i.e., where the QSF is “domiciled”).
QSFs are commonly employed to settle tort, breach of contract, and other claims allowed under §1.468B-1. When a company requires a QSF, it has determined that future settlement or judicial award payments will be necessary. If correctly executed, any transfers or payments made to the fund can be considered expenses incurred in the course of business and thus eligible for a tax deduction in the same year as the transfer.
Generally speaking, once the company transfers funds into the Qualified Settlement Fund, the funds cannot be returned to the company. To claim a deduction for funds transferred to the QSF, the company must relinquish any right to demand a refund. However, if all claims are satisfied, the Trustee may return unused portions to the company in certain circumstances.
One might question why a business should permanently transfer funds if there is a chance that there may be no financial obligations following a trial or appeal. In some situations, establishing an escrow account could be a more practical choice until the dispute resolution is final. Nonetheless, there are many reasons why a business may opt for a QSF.
When confronted with legal claims, businesses must explore avenues for paying judgment holders. Creating a QSF as an avenue for payments is worth considering for several reasons.
A QSF offers immediate tax deductions for all funds moved into the trust – To qualify for tax deductions, businesses must satisfy the “all events test” outlined in § 461. According to this test, there needs to be “economic performance.” Section 1.468B 3(c) of the Treasury Regulations (26 C.F.R. § 1.468B 3(c)) specifies that transferring funds to a Qualified Settlement Fund with the intention of settling a liability meets the economic performance test, making it eligible for deduction as a business expense.
A QSF effectively relieves the defendant from liabilities by taking over the responsibility for payments and judgment holders related to claims related to the QSF. When a defendant transfers the payment obligations to a QSF, the Trust Agreement governing the QSF stipulates “the release” of the defendant from all liability for those claims.
Upon establishment, a QSF frees the defendant from the administrative burden of dealing directly with claimants by shifting that responsibility to the QSF, which now deals directly with the claimants. The Trustee overseeing the QSF would manage these matters accordingly. The QSF and its Trustee are responsible for distributing payments among claimants regardless of differences in owed amounts or uncertainties surrounding these amounts.
QSFs enable companies to streamline management following the resolution of disputes, which can often drag on for extended periods. By utilizing QSFs, businesses can efficiently allocate funds to judgment holders without delay.
When dealing with the expenses of compensating individuals, there are concerns about budget and logistics. How many claimants will there be in the end? What amounts need to be paid to them? How will the company handle this uncertainty? The establishment of a QSF can address these concerns.
Once a QSF trust is set up and funded, the company can categorize any transfers as an expense. Decision-makers no longer need to worry about identifying all recipients or determining individual payment amounts. What matters for the company is the sum transferred to the fund irrespective of each claim value or judgment award.
By implementing a QSF, companies show goodwill. Moreover, once payments are disbursed to plaintiffs, the QSF can donate any remaining funds to a charity chosen by the company, should the company choose to do so. Opting for this, the company may enhance its reputation if presented and communicated effectively.
The noted benefits of a QSF collectively make a case for defendants to utilize QSF trusts to settle claims.
If your company is dealing with a dispute and considering setting up a QSF trust to settle matters, it’s advisable to seek advice from a tax and accounting specialist like Eastern Point Trust Company and learn how QSF 360 can resolve your settlement administration and dilemma in as little as one business day.
For more content on QSFs visit Eastern Point Trust’s – YouTube Channel.
Explore the differences between a Settlement Fund and a Qualified Settlement Fund (QSF). Learn their roles in resolving legal disputes, their benefits, and how they function. Understand the components of a QSF and why it's a superior solution.
A settlement fund is an account where the defendant’s payment holds (escrow) funds payable to the plaintiffs. Informal settlement fund escrow accounts have become less common due to their limitations compared to Qualified Settlement Funds (“QSFs”).
Both settlement funds and QSFs help settle legal disputes, offering a way to distribute settlement funds. Knowing the difference between a settlement fund and a QSF and how they function is crucial for individuals contemplating settling a legal issue.
A settlement fund, sometimes known as an escrow fund, compensation fund, or claims fund, is a pool of money set aside to resolve a legal dispute or pending claim(s). It is a financial resource from which disburses a defendant’s settlement obligations to the appropriate affected individuals or entities. The primary purpose of settlement funds is to provide streamlined and efficient ways to resolve disputes, provide tax benefits, promote fairness, and ensure that the parties receive their equitable share. However, ordinary settlement funds are not tax-efficient and typically do not offer the same financial flexibility and protections as a QSF. On the other hand, QSFs have built-in tax efficiencies for both plaintiffs and defendants that ordinary settlement funds do not provide.
By establishing a “QSF” settlement fund, the defendants can avoid contentious, lengthy, tax-inefficient, and costly post-settlement distribution processes and receive an immediate resolution and tax deduction. Likewise, with a QSF, plaintiffs have virtually unlimited time to settle secondary claims, create financial plans, and minimize tax burdens.
Both settlement funds and QSFs help streamline and simplify the resolution process for all involved parties, including the courts, by resolving all related claims via a single fund that acts as the alter ego of the defendant(s) and disburses the associated funds.
Furthermore, settlement funds and Qualified Settlement Funds both provide an expedient resolution process, which is particularly advantageous in cases where plaintiffs may face financial hardships, require immediate financial assistance, or have secondary disputes, complex liens, or government benefit considerations.
In cases where multiple plaintiffs are involved, both a QSF and a settlement fund allow for an equitable distribution of the available funds among all the affected parties and ensure that all claimants receive their fair share and benefit from the tax-deferred time to plan adequately.
Settlement funds and QFS can also offer confidentiality and privacy to the parties involved; thus, settlement negotiations, terms, and associated confidentiality agreements can remain private.
However, only Qualified Settlement Funds created under Section 468B provide and preserve valuable tax, financial planning, and other benefits for the defendant and plaintiffs. Non-QSF settlement funds do not have the same tax benefits and, in fact, may accelerate taxation and erode valuable tax planning options that would be available via a Qualified Settlement Fund.
A QSF has several essential components, including:
IRS regulation requires the approval of the creation of a QSF by a “governmental authority.” Proven platforms such as QSF 360 provide a quick and easy online platform to create a QSF in as little as one business day.
Once established, a QSF requires the transfer of funds from the defendants or responsible parties into the QSF.
Once the settlement fund, as a QSF, is established, administration by independent and experienced QSF administrators is necessary. The QSF Trustees and QSF Administrators are responsible for overseeing the QSF funds, ensuring compliance with Section 468B and the agreed-upon settlement terms, and managing the distribution of compensation to the claimants.
Settlement fund administrators are crucial in implementing the necessary procedures and controls to ensure the distribution process is carried out according to settlement terms.
The distribution process may involve several steps, such as establishing claimants’ eligibility, calculating the appropriate allocation, resolving liens and secondary disputes, and issuing payments to the plaintiffs. To ensure transparency and accountability, the QSF administrators must maintain accurate records of all distributions and provide regular reports to the relevant parties.
Establishing and utilizing non-QSF settlement funds and Qualified Settlement Funds provides a solution for resolving legal disputes fairly and efficiently. However, Qualified Settlement Funds (QSF) settlement funds are generally a superior solution to “non-QSF” settlement funds. By establishing a “QSF” settlement fund, the defendants can avoid contentious, lengthy, tax-inefficient, and costly post-settlement distribution processes and receive an immediate tax deduction.
Further, the Plaintiffs benefit from valuable tax advantages and additional financial planning flexibility and time.
To access more educational information about settlement funds and Qualified Settlement Funds, visit here.
Qualified Settlement Funds (QSF) – Listicle of 12 Things to Know. Learn about their purpose, benefits, eligibility, tax implications, QSF administration, etc.
Qualified Settlement Funds (QSF) – Listicle of 12 Things to Know:
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[7/8/24] Joe Sharpe, ETPC President, explained, “QSFs are powerful financial tools to streamline and manage settlements, especially in complex cases. They provide tax benefits, flexibility, and efficient administration for all parties involved. With platforms like QSF 360™, creating and managing a QSF is quick, easy, and fully compliant. From establishing a QSF to understanding the roles of administrators, tax implications, and investment options, our comprehensive listicle covers all you need to know about these financial mechanisms.”
Learn the advantages of QSFs over other settlement structures, QSF regulatory oversight, and best practices for effective management. Make the most of your settlements with QSFs and ensure a smooth, compliant, and beneficial process.
Eastern Point Trust Company invites legal professionals, plaintiffs, and all interested parties to explore more and discover the transformative potential of QSFs in post-settlement dispute resolution. To read the complete listicle and learn more about the advantages of QSFs, visit https://www.easternpointtrust.com/articles/qualified-settlement-funds-listicle-of-12-things-to-know.
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The co-designer of the Plaintiff Recovery Trust, Lawrence Eisenberg, a tax attorney and founder of Forward Giving, Inc., a 501(c)(3) charity, publishes in Tax Notes an article addressing the double taxation of settlements.
The co-designer of the Plaintiff Recovery Trust, Lawrence Eisenberg, a tax attorney and founder of Forward Giving, Inc., a 501(c)(3) charity, publishes in Tax Notes an article addressing the double taxation of settlements.
[7/16/2024] — In a thought-provoking article published in Tax Notes* Lawrence J. Eisenberg, an experienced tax attorney, describes the perplexing issues affecting individual plaintiffs in litigation recoveries and considers how those issues can be addressed, including by using a charitably-based trust-based solution. The article “The Individual Plaintiff Tax Trap — A Conundrum and a Solution” delves into the intricacies of the taxation of litigation recoveries and addresses methods to mitigate the adverse tax consequences some individual plaintiffs face.
Background
Eisenberg’s article highlights the strange and often inconsistent tax treatment of individual plaintiff litigation recoveries under the Internal Revenue Code. Despite the Supreme Court’s 2005 decision in “Commissioner v. Banks”, which held that plaintiffs must report the entire recovery as taxable income—including the portion payable to attorneys—many plaintiffs (and their attorneys and advisors) remain unaware of the potential tax pitfalls when such recoveries do not fall under tax-free categories, e.g., damages for physical injuries.
The Individual Plaintiff Tax Trap
The crux of the issue lies in the deductibility of attorney’s fees. Some recoveries are tax-free, so attorney fee deductibility is not relevant, or allow for an above-the-line deduction of these fees. Other recoveries can result a “double tax”, because in those situations, the attorney fee portion of the recovery is taxable, but the attorney fee itself is not deductible. This leads to significantly diminished net recoveries. Eisenberg’s article includes a detailed example demonstrating how a plaintiff’s net recovery can be less than 10% of the total amount, with the government and attorneys each receiving several times more than the plaintiff!
A Trust-Based Solution
To address this inequity, Eisenberg proposes that a plaintiff affected by the double tax create a Plaintiff Recovery Trust (PRT). A PRT allows plaintiffs to transfer their litigation claims to a specially designed split-interest charitable trust. By doing so, the litigation claim becomes an asset of the trust, and any recovery is received by the trust, which then pays the net recovery to the trust beneficiaries, including the plaintiff. The PRT uses ordinary trust law principles and aims to achieve fairer tax treatment by separating the ownership of the litigation claim from the individual plaintiff.
Key Benefits of the Plaintiff Recovery Trust
- Equitable Tax Treatment: By treating the litigation claim as a trust asset, a Plaintiff Recovery Trust results in the plaintiff not being taxed on the portion of the recovery paid to their attorneys.
- Structured recovery: The PRT trust structure allows for a more organized and potentially tax-efficient distribution of recoveries. (It also permits the use of structured settlements as part of the solution.)
- Charitable Component: The PRT includes a charitable beneficiary, adding a philanthropic dimension to the solution.
Conclusion
Eisenberg’s article is a call to action for tax professionals and litigation attorneys to recognize and address the unfair tax treatment many individual plaintiffs face. The PRT trust-based solution offers a way to alleviate the financial burden imposed by current tax law, so that plaintiffs retain a fair share of their recoveries.
See the full article on the taxation of settlement proceeds.
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Eastern Point Trust Company is pleased to announce the release of a new guide designed to address the challenging intricacies of post-settlement litigation disputes.
Eastern Point Trust Company Unveils Comprehensive Guide on Navigating Post-Settlement Disputes and Complexities with Qualified Settlement Funds
[5/17/2024] — Eastern Point Trust Company is pleased to announce the release of a new guide designed to address the challenging intricacies of post-settlement litigation disputes. The guide focuses on utilizing Qualified Settlement Funds (QSFs), also known as 468B trusts, as a streamlined solution for efficient settlement fund management and dispute resolution.
It is not uncommon for secondary disputes to arise following a litigation settlement or court award. These disputes can range from family disagreements over their "fair share" to lawyers disputing fee splits, plaintiffs contesting attorney fees, and third-party lien holders emerging to stake claims against the litigation proceeds. Such complexities often hinder the settlement process and prolong the resolution.
Eastern Point Trust Company's newly released guide provides detailed insights into how QSFs can be employed to manage these disputes effectively. By offering a structured approach to fund management and tax compliance and providing the necessary time for informed decision-making, QSFs present a viable solution to post-settlement challenges.
Sam Kott, Vice President of Eastern Point Trust Company, emphasized the significance of the guide, stating, "This guide explores the advantages of QSFs, specifically their ability to address complex issues such as post-settlement disputes, secondary litigation, and lien resolution. The guide also provides direction on navigating post-settlement challenges and highlights the benefits of QSFs in achieving the best possible outcomes for all parties involved."
The guide delves into the various advantages of utilizing QSFs, including:
Eastern Point Trust Company invites legal professionals, plaintiffs, and all interested parties to explore the guide and discover the transformative potential of QSFs in post-settlement dispute resolution. To read the complete guide and learn more about the advantages of QSFs, visit here.
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Eastern Point is proud to announce the release of its latest publication, Unveiling the Complex World of Taxable and Tax-Free Settlements.
Eastern Point is proud to announce the release of its latest publication, Unveiling the Complex World of Taxable and Tax-Free Settlements.
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[5/17/2024] — Eastern Point is proud to announce the release of its latest publication, Unveiling the Complex World of Taxable and Tax-Free Settlements. This comprehensive guide delves into the intricate workings of taxable and non-taxable settlements, offering invaluable insights into compensatory damages, punitive damages, and the tax treatment of various settlement types.
Ms. Rachel McCrocklin, Eastern Point’s Chief Trust Officer, commented, “The guide provides a detailed understanding of the pivotal role of IRS Section 104 and the taxability of various settlement types. Our goal is to equip readers with the knowledge to make informed decisions and minimize potential tax liabilities.”
The guide explores strategic methods to minimize tax obligations on settlements, including leveraging structured settlement annuities, Plaintiff Recovery Trusts, and proper allocation in settlement agreements. It is an essential resource for individuals and businesses navigating the complex landscape of settlement taxation.
Arm yourself with knowledge, make informed decisions, and minimize potential tax liabilities with Eastern Point's newest guide.
For more information on Unveiling the Complex World of Taxable and Tax-Free Settlements, please visit https://www.easternpointtrust.com/articles/unveiling-tax-free-settlements-what-you-need-to-know or contact 855-222-7513.
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A new comprehensive guide has emerged catering to those seeking to conduct private placements. This guide outlines the pivotal role of escrow accounts in private placements, providing a secure, regulated structure that safeguards investor assets and boosts investor confidence.
A new comprehensive guide has emerged catering to those seeking to conduct private placements. This guide outlines the pivotal role of escrow accounts in private placements, providing a secure, regulated structure that safeguards investor assets and boosts investor confidence.
FOR IMMEDIATE RELEASE
[5/2/2024] — A new comprehensive guide has emerged catering to those seeking to conduct private placements. This guide outlines the pivotal role of escrow accounts in private placements, providing a secure, regulated structure that safeguards investor assets and boosts investor confidence.
It reviews the advantages of choosing a trust company over a traditional bank account for escrow services, emphasizing active independent oversight that enhances transaction security and integrity.
Ned Armand, CEO, noted, “The guide also highlights the critical role of an escrow agent in managing funds prudently, ensuring a smooth progression of transactions under the regulatory frameworks.” Offerors of private equity and Reg D, Reg A, Reg A+, Reg CF, and Reg S offerings are encouraged to explore this guide, available on Eastern Point Trust Company.
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In today's dynamic business landscape, where environmental liabilities pose significant challenges, the Qualified Settlement Fund (QSF) emerges as a beacon of efficiency and reliability.
In today's dynamic business landscape, where environmental liabilities pose significant challenges, the Qualified Settlement Fund (QSF) emerges as a beacon of efficiency and reliability. Contrasting against traditional Environmental Remediation Trusts (ERT), Eastern Point’s QSF offers unparalleled advantages, revolutionizing the approach towards environmental liability management.
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[2/27/2024] — In today's dynamic business landscape, where environmental liabilities pose significant challenges, the Qualified Settlement Fund (QSF) emerges as a beacon of efficiency and reliability. Contrasting against traditional Environmental Remediation Trusts (ERT), Eastern Point’s QSF offers unparalleled advantages, revolutionizing the approach towards environmental liability management.
The Qualified Settlement Fund stands as a testament to expediency, with the capability to be established and funded within a mere business day, a stark contrast to the lengthy processes associated with ERTs. By swiftly assuming environmental liabilities from present and future claims under CERCLA, state, and local law, QSF ensures immediate action and resolution.
One of the most compelling aspects of QSF is its affordability, with establishment costs as low as $500. This cost-effectiveness, coupled with the tax advantages it provides over ERTs, makes QSF an attractive proposition for businesses seeking prudent financial solutions.
Flexibility is another hallmark of QSF, allowing for single-year or multi-year funding without any maximum duration constraints, ensuring adaptability to diverse business needs. Furthermore, the ability to hold real estate expands the horizons of asset management within the fund.
The benefits extend to tax optimization, with QSF accelerating the transferor's tax deduction for funds transferred to the current tax year, thereby enhancing financial planning and efficiency. Moreover, by shifting liability and associated funding transfers irrevocably to the QSF, businesses can streamline their balance sheets, mitigating risks and enhancing transparency.
In addition to these financial advantages, QSF facilitates seamless settlement agreements to capitate and resolve environmental liabilities, assuring regulators and interested parties of the irrevocable availability of funds for amelioration.
The transition to QSF not only eliminates future administrative burdens but also entrusts the fund's administration to a dedicated trustee, relieving businesses of operational complexities and enhancing focus on core activities.
In conclusion, the Qualified Settlement Fund stands as a beacon of innovation in environmental liability management, offering unmatched advantages over traditional Environmental Remediation Trusts. Its expediency, affordability, flexibility, and tax optimization capabilities redefine the landscape, empowering businesses to navigate environmental challenges with confidence and efficiency.
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Eastern Point Trust Company (“EPTC”) announced that it entered into a sponsorship with the National Forest Foundation (“NFF”) to provide grant funding in support of NFF’s mission to restore and enhance our National Forests and Grasslands.
Eastern Point Trust Company Announces Sponsorship Grants to National Forest Foundation
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[10/13/2022] — Eastern Point Trust Company (“EPTC”) announced that it entered into a sponsorship with the National Forest Foundation (“NFF”) to provide grant funding in support of NFF’s mission to restore and enhance our National Forests and Grasslands.
Working on behalf of the American public, the NFF leads forest conservation efforts and promotes responsible recreation. Its mission is founded on the belief that these lands, and all they provide, are an American treasure and vital to our communities’ health.
Rachel McCrocklin, Eastern Point’s Chief Client Officer, stated, “Eastern Point welcomes the opportunity to partner with the National Forest Foundation in support of its mission to improve and protect our national lands. A portion of Eastern Point’s revenue is dedicated to funding priority reforestation and enhanced wildlife habitat by supporting the National Forest Foundation’s 50 million for Forrest campaign.”
About Eastern Point Trust CompanyWith over three decades of trustee and trust administration experience, Eastern Point is a world leader in trust innovation that provides fiduciary services to individuals, courts, and institutional clients.
Eastern Point has the benefit of practical experience and industry-leading technology, providing services to over 6,000 trusts with more than 20,000 users across the U.S. and internationally.
About The National Forest FoundationThe National Forest Foundation is the leading organization inspiring personal and meaningful connections to our National Forests, the centerpiece of America’s public lands.
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Eastern Point Trust Company (“EPTC”) announced recent successes of the Plaintiff Recovery Trust (“PRT”) solution in solving the Plaintiff Double Tax, which is the unfair result of 2017 legislation that can cut plaintiff recoveries in half.
Eastern Point Trust provides services across the U.S. and internationally.
FOR IMMEDIATE RELEASE
[11/21/2022] — Eastern Point Trust Company (“EPTC”) announced recent successes of the Plaintiff Recovery Trust (“PRT”) solution in solving the Plaintiff Double Tax, which is the unfair result of 2017 legislation that can cut plaintiff recoveries in half.
Glen Armand, Eastern Point’s CEO, expressed, “Eastern Point’s gratitude for the testimonials of Mirena Umizaj, Joseph Di Gangi, Rebekah Reedy Miller, Susan Gleason, Jennifer White, Andy Rubenstein, and Zane Aubert. By utilizing the PRT, you are the catalyst for saving plaintiffs over $30 million of federal and state taxation.”
Mr. Armand also announced Joseph Tombs as Director of Plaintiff Recovery Trusts (PRT). Mr. Armand also noted, “The contributions of Lawrence Eisenberg and Jeremy Babener for partnering on our newest settlement solution.”
Settlement and financial planners and CPAs can learn and access resources on Eastern Point’s PRT Planner Page here: https://www.easternpointtrust.com/plaintiff-recovery-trust-for-planners
About Eastern Point Trust Company
Eastern Point is a world leader in trust innovation that provides fiduciary services to individuals, courts, and institutional clients across the U.S. and internationally.
With over three decades of trustee and trust administration experience, Eastern Point provides the benefits of practical experience, industry-leading technology, and innovation. Eastern Point Trust provides services across the U.S. and internationally.
About The Plaintiff Recovery Trust
The Plaintiff Recovery Trust is the proven solution to increase the amount plaintiffs keep in taxable cases. Without it, plaintiffs are taxed on the settlement proceeds paid to their lawyers. https://www.easternpointtrust.com/plaintiff-recovery-trust
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Qualified Settlement Funds (QSFs) are powerful financial tools to administer settlements, especially in complex matters. Parties involved in disputes contemplated under 1.46B-1 et seq. can effectively manage and benefit from Qualified Settlement Funds’ tax and financial advantages.
Qualified Settlement Funds (QSFs), a 468B trust, are valuable and crucial in managing litigation settlements efficiently and effectively. "QSF", which stands for "Qualified Settlement Fund", is a fund established as a trust or account established to hold settlement proceeds from litigation. According to the definition under Treasury Regulations, it is an escrow account, trust, or fund established according to an order of or approved by a government authority to resolve or satisfy claims.
This comprehensive infographic guide explains the essential aspects of Qualified Settlement Funds:
The guide provides valuable insights, tips, and rules of thumb for legal professionals, claimants, and other stakeholders about how a QSF account benefits the settlement process. A QSF offers many advantages, including immediate tax deduction for defendants, tax deferral for claimants, and efficient management of settlement proceeds. QSFs are commonly used in class action lawsuits, mass tort litigation, and cases with multiple claimants, but can also provide benefits in single claimant cases.
Setting up a QSF involves petitioning a government authority and appointing a QSF Administrator to oversee the fund. The QSF Administrator, often a platform like QSF 360, is responsible for obtaining an EIN, handling tax reporting, overseeing QSF administration, and making distributions to claimants. Online QSF portals streamline the Qualified Settlement Fund administration process.
Partnering with an experienced QSF Administrator is essential. Services like QSF 360 from specialize in QSFs for both large and small cases and can help ensure compliance with IRC § 1.468B-1 and other regulations.
In summary, Qualified Settlement Funds are a powerful tool for managing settlement proceeds. With proper planning and administration, QSFs provide significant tax benefits, enable efficient distribution of litigation proceeds, and help bring litigation closure. Understanding what is QSF and how to leverage QSFs is invaluable for any legal professional involved in today's settlements.
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.
BP OIL SPILL/
DEEPWATER HORIZON
INDONESIA JETCRASH FLIGHT 152
Bath & Body Works
VW GROUP OF AMERICA INC SETTLEMENT (DIESEL CASE)
3M
AMAZON
GENERAL MOTORS
MATCH
INTUIT MULTI-STATE SETTLEMENT
BERNARD MADOFF
PURDUE PHARMA
POLARIS INDUSTRIES
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