Discover the strong privacy protections and effective shields offered by Qualified Settlement Funds (QSFs) against discovery demands. Learn about QSF 360 platform's innovative privacy and protection features.
§ 468B Qualified Settlement Funds (QSFs) are tax-qualified legal entities that are useful to settle single-event, mass torts, and class action lawsuits and allow the consolidation of multiple “related” claims into a single fund for which the establishment and operation are governed by 26 C.F.R. § 1.468B-1, et seq.
Ensuring the privacy and security of a Qualified Settlement Fund and its information is crucial. In the case of pre-funded settlement funds, safeguarding sensitive information to prevent unauthorized or adverse party access protects the defendant’s privacy and the integrity of the funds. The privacy provisions of a QSF and its existence as a separate legal entity can hinder adverse parties from inflating their claims based on knowledge of the settlement fund’s available assets.
Further, a properly designed and drafted confidential settlement fund can provide valuable “discovery limitations.” Maximizing these advantages requires an experienced and steadfast trustee who will vigorously assert the associated privacy and limitation powers to suppress undesirable litigation discovery.
In today's cancel culture, unethical competitors, and law-fare world, defendants (accused) have justifiable apprehension regarding the question of privacy or discoverability of the details by adverse parties. In particular, when a defendant(s) utilizes a QSF to address multiple current or future claims, there can be concerns (albeit largely unfounded) regarding whether others may acquire information related to the defendant’s identity or regarding the existence of the fund and its level of funding by searching a public source or by discovery through discovery.
Unlike other entities, bank accounts, or trusts whose information is readily available through searchable databases or ordinary discovery, Eastern Point’s QSF Confidential platform, has no such public sources or databases. Accordingly, no government database searches are even possible. As such, adverse parties have no likely chance of discovering a Qualified Settlement Fund’s existence or the identity of a defendant associated with it.
Pro Tip: Even if the existence of the settlement fund becomes known, a properly drafted confidential QSF gives the trustee many practical and effective tools to quash discovery inquiries.
Pro Tip: Having a trustee who is a vigorous advocate in defending the privacy of the parties and the trust is a critical element.
Pro Tip: A trustee who maintains a robust and comprehensive privacy policy that applies to any third parties making a claim upon the trust assets or serving a demand for discovery is indispensable in protecting the QSF’s privacy. Non-trustee administrators may have no enforceable privacy policy protections for the QSFs they administer as non-trustees.
With QSF Confidential - privacy is maintained by ensuring the fund’s existence and claimants’ identities remain sealed and confidential. This confidentiality is crucial in sensitive legal matters, protecting the individuals involved from unwanted exposure. To safeguard the anonymity of the parties and the financial condition of the § 468B trust, the trustee plays a vital defensive role in protecting information from prying adverse parties. The trustee may employ various tactics by challenging all requests, imposing legal barriers, decanting, applying jurisdiction selection requirements, and utilizing the courts to avoid subpoenas or quash demands for information.
As mentioned, in a properly drafted confidential settlement, the trustee will have the necessary power to employ decanting, situs-shifting, and other trustee-power tactics to protect the parties’ privacy and defeat discovery fishing expeditions.
QSF Confidential transactions and internal records are private and not part of public records. Additionally, the associated tax reporting does not disclose the identity of the defendant (accused) moreover, the IRS is prohibited from disclosing tax returns based on a civil subpoena. This integrated approach prevents access to private information related to the parties or the trust’s assets and activities. Here again, we see that privacy provisions in an adequately designed trust, such as with QSF Confidential, can protect the privacy of all associated documents and information.
Pro Tip: Courts are highly reluctant to allow third parties (with no standing) to breach all parties' privacy solely for a fishing expedition.
468B settlement funds offer strong privacy protections and can shield against discovery and other inquiry demands. The QSF Confidential platform (powered by the QSF 360) provides the first-of-its-kind confidential, innovative, and robust privacy and protections from the discovery of identities, accusations, and terms.
A comprehensive overview of naming conventions for Qualified Settlement Funds (QSFs), including length restrictions, statutory requirements, and safe harbor options to ensure compliance and avoid misleading or deceptive naming.
Qualified Settlement Funds (QSFs) are valuable statutory-based financial mechanisms that offer tax benefits and flexibility in managing settlements and the associated settlement administration across various disputes and litigation.
Established under 26 USC §468B and 26 CFR §1.468B-1 et seq., defendants can “transfer” settlement obligations, claim the associated tax deductions immediately, and facilitate the tax-efficient disbursement of funds to the claimant(s).
Here, we explore the proper naming conventions for a Qualified Settlement Fund name, highlighting the key considerations and appropriate naming conventions to support the fund’s integrity and purpose.
Pro Tip: For more information on QSFs, how to create, their benefits, and how they work, see the following links
The naming conventions in QSFs are not merely a formality but a necessity. It is important to note that, in addition to the statutory requirements for QSFs. Therefore, let’s do an overview of QSF naming guidelines and statutory requirements:
A governmental authority must approve and exercise jurisdiction over a potential QSF for it to become a QSF. That authorizing governmental authority will have its own policies and requirements for QSF naming conventions. Among other things, these policies ensure that the name of a QSF is not intentionally (or unintentionally) misleading.
Generally, state and federal law prohibits any entity from being deceptively named. For example, you may not name a trust using the term “Inc.” in an attempt to misrepresent the trust as a corporation. Also, state statutes prohibit naming a sole proprietorship using the term “LLC” to imply it is a Limited Liability Company when it is not.
Moreover, it is crucial to note that a QSF is not an Interest on Lawyers Trust Account (“IOLTA”) nor an account owned by a law firm; thus, no QSF should be labeled to imply that it is. Severe ethical consequences could result. Therefore, it is prudent never to use a name for a QSF that would give the impression that the QSF is an IOLTA or a law firm’s corporate bank account.
Noted QSF commentator Robert Wood, in his article Qualified Settlement Funds Named Like Lawyer Trust Accounts, while discussing the flexibility available in naming a QSF also raises the concern of possible ethical or bad faith issues surrounding the use of a misleading or deceptive QSF name.
The following provides roadmap examples of QSF names that work and others that may likely cause issues:
Generally speaking, there are safe harbors when naming a QSF:
If a law firm uses, or plans to use, several QSFs, then standardizing naming conventions allows more effective case management and quicker access to essential documents. A consistent naming convention also improves transparency and avoids confusion for audits, legal reviews, and timely and accurate distribution of funds.
Avoiding misleading or deceptive naming conventions when naming a QSF is crucial. The name should not misrepresent the nature of the fund or its ownership, as this could lead to confusion or legal and ethical challenges.
Pro Tip: See the related article regarding Who Owns a QSF.
Avoid overly complex or obtuse names for a QSF. Names that are difficult to understand or remember can hamper communication and operations or lead to mistakes. A straightforward and clear name ensures that all parties, including the defense, claimants, and the associated legal and financial professionals, can easily refer to the QSF without confusion or question.
When navigating QSFs, carefully selecting a compliant name is not merely a governmental requirement; it can also remove barriers and eliminate questions. Recognizing common pitfalls and adhering to IRS rules and nondeceptive guidelines in choosing a name can avoid potential ethical conflicts and ensure the fund’s smooth operation.
An in-depth exploration of the common myths and realities surrounding Qualified Settlement Funds (QSFs) and their administration. Dispel misconceptions and highlight the benefits for all parties involved in litigation.
Qualified Settlement Funds (QSFs) are qualified tax entities established under the legal framework of 26 U.S.C. § 468B, regulated under 26 C.F.R. § 1.468B-1, and operate as statutory trusts. These Section 468B trusts are settlement funds created upon the approval of a “government authority.” The Qualified Settlement Fund Administrator and associated Administration are critical to a successful implementation, which streamlines the settlement process for efficient distribution to the involved parties. This consolidation simplifies the fund’s administration and introduces tax benefits designed to empower the plaintiffs financially.
This article will explore the common myths regarding Qualified Settlement Funds and Qualified Settlement Fund Administration.
One common misconception about Qualified Settlement Funds is that they are exclusively utilized for mass tort and class action settlements. However, the versatility and application of settlement accounts extend far beyond these areas.
Broad Application: They are designed to resolve and satisfy claims, including those made before the fund is established and funded. This broad application makes them suitable for most torts, breach of contract, and environmental liability cases.
Diverse Case Types: The use of settlement funds spans many cases. They are not only applicable in scenarios with large numbers of plaintiffs, such as product-liability cases, drug cases, and sexual abuse cases, but also in single claimant cases.
Ethics and Compliance: Particularly in cases with multiple plaintiffs, settlement trusts play a crucial role in ensuring compliance with ethics rules.
Uncooperative Defendants: They support structured settlement solutions even when a defendant or insurer is unwilling to enter directly. Moreover, they can effectively pay adverse parties with and without liens and address lien resolutions.
The myth that only plaintiffs benefit overlooks the multiple advantages these funds offer to all parties involved in litigation. The following outlines the benefits for both plaintiffs and defendants, showcasing the unique utility of QSFs:
Deferred Taxation: Plaintiffs benefit from deferring taxes on their settlement amounts until the funds are distributed, providing significant financial planning flexibility.
Flexibility: Plaintiffs gain financial planning and tax benefits by avoiding immediate access to income from the settlement and having ample time for negotiations to address liens and choose distribution methods.
Conflict Resolution: They facilitate the resolution of disputes among multiple plaintiffs and their attorneys, contributing to a more efficient and equitable settlement process.
Settlement Planning: Plaintiff attorneys can secure the settlement proceeds in a § 468B account, providing a safe space to work out a comprehensive settlement plan, address liens, and engage in probate proceedings without the pressure of immediate distribution.
Immediate Tax Deductions: Defendants can immediately claim tax deductions for their contributions to a § 468B trust, even if the funds have not yet been distributed among the plaintiffs. This benefit to the defendant is particularly significant because it allows for deductions when the settlement is paid into the fund rather than upon distribution to each plaintiff.
Litigation Closure: By transferring into a § 468B settlement trust, defendants can remove themselves from the ongoing settlement administration process, often receiving a permanent release upon their contribution. Thus, settlement funds simplify the settlement process and provide financial and legal closure.
Streamlined Process: Forming a qualified settlement account can bridge difficulties when plaintiffs and defendants cannot agree on tax language or reporting, ensuring that all tax, legal fee, and payout issues are managed strictly between plaintiffs and their lawyers outside the influence of defendants.
Contrary to the prevalent belief that establishing a Qualified Settlement Fund is costly, platforms like QSF 360 offer creation for a setup fee of only $500. This affordable process and the transparent costs associated with setting up and maintaining a QSF provide reassurance about the administration and financial aspects.
The myth surrounding the overwhelming complexity of Qualified Settlement Fund administration can deter parties from considering this efficient settlement solution. However, understanding the structured roles and responsibilities can demystify the process:
Dispelling the myth that Qualified Settlement Funds offer limited tax advantages requires an in-depth exploration of the taxation benefits they present for defendants and plaintiffs. Here is a concise breakdown:
Immediate Tax Deduction for Defendants: Upon transferring into a QSF, defendants are eligible for an immediate tax deduction, even if the funds have yet to be distributed to the plaintiffs. The upfront deduction can significantly reduce the defendant’s taxable income in the fiscal year of the contribution.
Income Deferral for Plaintiffs: Plaintiffs can defer taxation on their settlement amounts until distribution. The benefit of deferral can offer substantial financial planning advantages, allowing plaintiffs to potentially lower their tax obligations by receiving funds in years when they may be in a lower bracket.
Structured Settlements and Legal Fees: Both structured settlements and structured legal fees are available post-defendant involvement, providing plaintiffs and their attorneys the flexibility to plan for future financial needs. Notably, structures, including the attorney fees portion of the claimant proceeds, can circumvent constructive receipt and economic benefit doctrines, taxing plaintiffs and their attorneys only upon receiving each payment.
Separate Tax Entity Status: As a separate tax entity, they are subject to taxation on interest, capital gains, and dividend income at the applicable maximum corporate income tax rate. However, the fund benefits from deductions for administrative costs, incidental expenses, and losses sustained in property transactions.
Accrual Accounting and Corporate Treatment: QSFs must employ an accrual method of accounting and are treated as corporations for subtitle F of the Internal Revenue Code. This corporate treatment simplifies tax reporting and compliance, ensuring that the tax imposed on the fund’s modified gross income is treated consistently with corporate tax obligations.
No Explicit Time Limit: The absence of a strict time limit for the existence provides flexibility in managing complex cases that may span several years. This enduring nature ensures that all controversies can be resolved without rushing the process, benefiting all parties involved.
The myths surrounding the Qualified Settlement Fund and its administration are unfounded. However, the QSF Administrator is critical to ensure a seamless operation.
Particularly noteworthy is the capacity of settlement funds to extend beyond limited use scenarios, provide benefits to plaintiffs and defendants, and offer significant tax advantages that can profoundly impact financial planning and legal strategy.
In navigating the complexities and ensuring optimal outcomes within the § 468B framework, engaging a skilled and experienced QSF Administrator is vital. Only a licensed fiduciary for settlement fund administration can ensure compliance, maximize tax benefits, and streamline the settlement process for all parties involved. This professional insight and management are pivotal in harnessing the full tax potential, transforming them from a misunderstood financial instrument into a robust dispute resolution and settlement planning solution.
Discover the harsh reality of punitive damages taxation, how it affects plaintiffs, and solutions to increase after-tax recovery by 50% to 150%. Learn more about reducing taxation on settlement proceeds.
Punitive damages are always fully taxable. This unwelcome and often unknown fact is true when punitive damages are awarded in conjunction with a tax-free compensatory award (e.g., physical injuries or sickness) or a taxable claim (e.g., non-physical injuries, defamation, or another tort).
The taxes you will pay are likely much higher than you think. Under the current tax code, you must pay taxes on the portion of the punitive award you do not even receive – like the attorney’s fees and costs.
Unfortunately, under our tax laws, a person as a plaintiff receiving punitive damages is fully taxed on the punitive portion and is thus treated more punitively than the defendant paying them. This harsh tax reality is because of the odd but real “plaintiff double tax.” 1
The plaintiff’s double tax arises because the plaintiff is taxed on the entire taxable recovery – including the punitive damages – but cannot deduct the attorney fees and costs associated with the recovery. That is because such fees and costs are treated as “miscellaneous itemized deductions” (MIDs), which are not fully deductible.
Here is a realistic example: Joan, living in California, receives $2,000,000 in damages for a physical injury and an additional $10,000,000 in punitive damages. The $2,000,000 isn’t taxed, but the $10,000,000 punitive portion of the settlement is.
Out of the above, Joan owes her attorneys a 40% contingency fee on the punitive portion ($4,000,000). However, she cannot deduct the attorney’s fees for federal or state income tax purposes. Also, her combined Federal and State income tax rate is around 50% since she’s in the top tax bracket. As a result, her “net-net” (after-tax and attorney fees) proceeds on the punitive portion is around $1,000,000 - just 10 cents on the dollar of the total punitive proceeds, and could be even less!
WOW, poor Joan – Regretfully, there are other unpleasant realities Joan shall be surprised to learn:
Talk about punitive! (Other epithets may come to mind.)
In certain limited case types, such as employment and civil rights discrimination, an “above the line” deduction is indeed allowable for attorney’s fees and costs, avoiding the plaintiff’s double tax. However, this deduction rarely applies since punitive damages are infrequently awarded in those cases.
Caution – PRO TIP: Various dubious suggestions haunt the internet and purport to circumvent the plaintiff’s paying taxes on the attorney portion of the taxable recovery. These suspect “tax tricks” are designed to misclassify a portion of the proceeds, including issuing separate Form 1099s for the plaintiff and the attorney or alleging a quasi-partnership arrangement between the plaintiff and the attorney. Thus, take caution; the Supreme Court precluded these approaches in the Commissioner v. Banks Supreme Court decision. Employing such tenuous schemes may open the door to significant tax underpayment penalties and possibly even more severe allegations and actions by the IRS. Also, the above-the-line deduction is plainly shown on the tax return and is a glaring audit signal to the IRS; the larger the deduction, the more likely the audit risk.
Plaintiffs who may receive punitive damages may wish to consider a Plaintiff Recovery Trust (PRT) before the claim becomes final or fully settled. A PRT is a specially designed trust that could increase the after-tax recovery by 50% to 150%, and the PRT does not rely on the “above the line deduction.” However, timely action is necessary, and the PRT must be in place before the matter is finalized, including appeals, so the earlier in the case cycle, the better, and a failure to act promptly could result in unnecessary taxation.
To learn more about PRTs, visit the PRT web page or call (855) 222-7513 to speak with a PRT Expert to see if your case qualifies.
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:
FOR IMMEDIATE RELEASE
[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.
FOR IMMEDIATE RELEASE
[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.
CTRO
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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.
FOR IMMEDIATE RELEASE
[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.
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