Learn how QSF Administrators streamline settlements, manage tax benefits, and ensure compliance with IRS regulations for efficient fund administration.
Establishing a Section 468B Qualified Settlement Fund (QSF) is not just a move but a strategic maneuver that benefits both defendants and claimants. It allows defendants to swiftly resolve claims and claim tax benefits, bypassing the usual delay in settlement payments. For claimants, it opens up avenues for settlement planning and independent identification of tax deferral opportunities. This adaptability and the tax-deferred handling of settlement funds serve both parties' interests, underscoring the importance of understanding how these funds operate.
The effective management of these tax tools, such as a QSF, hinges on the expertise of the fund administrator. This role is pivotal for maintaining the integrity and efficiency of the fund. The administrator's duties, which include fund recordkeeping and settlement administration tasks and oversight, are crucial for ensuring compliance with the requirements outlined in section 1.468B 1 of the Internal Revenue Code. This underscores the importance of the administrator's role and expertise with these types of funds.
Moreover, the expertise in settlement strategies that a proficient and knowledgeable fund administrator brings is not just essential, it's a cornerstone of confidence. Their integral role in ensuring the proper functioning of the fund, coupled with their skills and guidance, instills confidence in their abilities and provides a timely settlement process for all parties involved.
Qualified Settlement Funds, or 468B trusts, are tax entities governed by a detailed legal structure crucial for resolving disputes and claims more economically. These trusts are established through a process outlined in 26 CFR § 1.468B 1(c) involving approval from a body, adherence to specific laws, and obtaining a federal tax ID number.
When dealing with a settlement fund, it's crucial to rely on the expertise of a settlement fund administrator (QSF Administrator). These professionals specialize in managing the processes and requirements linked to settlement funds. Engaging their services can benefit individuals and organizations involved in settlement agreements.
One key reason for engaging an administrator is their knowledge and experience overseeing settlement funds. They are well acquainted with the rules and regulations governing funds, ensuring adherence to all tax obligations. Their expertise enables them to navigate the complexities of the settlement process, including distributing funds to plaintiffs and resolving any disputes. Accuracy and compliance will be accomplished by entrusting your settlement fund to an administrator.
Another benefit of utilizing an administrator is the ability to streamline the administration process. The process includes establishing the fund, supervising the fund holdings, and disbursing funds to plaintiffs. A proficient administrator can efficiently handle these responsibilities, thus saving time and effort and relieving you of administrative burdens.
The administrator has the tools and systems to effectively handle funds, ensure operations, and reduce delays or mistakes. With their help, you can focus on other tasks while being reassured that the Qualified Settlement Fund is administered efficiently, providing security and peace of mind.
Moreover, the administrator can offer guidance, assistance, and support throughout the structured settlement process, and their expertise can improve tax and financial outcomes for everyone involved. Additionally, they can advise on tax implications to assist you in making informed decisions about the settlement fund.
Additionally, the fund administrator oversees the fund’s tax filings and payments, ensuring strict compliance with Section 468B. Adherence to this regulation is paramount for ensuring operations conform to the applicable tax laws.
Settlement funds also facilitate claims resolution by providing transparency and tax-deferred benefits to all involved parties. Thus, the administrator plays a crucial role in the settlement administration process, ensuring compliance, financial oversight, and the equitable distribution of funds.
A fund administrator carries out various tasks when administering a settlement fund. These professional administrators are integral to the settlement process by fulfilling tax, financial, and administrative duties with transparency and thoroughness. Key elements include:
The administrator relieves law firms of IOLTA responsibilities, facilitates tax-preferred choices, and ensures prompt and equitable payouts to claimants. This alleviates the administrative burden on law firms, providing reassurance and reducing stress. Selecting the proper administrator involves weighing several factors to ensure proficient and compliant settlement funds. It is essential to consider the expertise and capacity of an administrator.
There are key advantages to having a licensed fiduciary as the administrator. A licensed fiduciary brings knowledge and experience, safeguarding compliance with all regulations and guidelines. Additionally, leveraging a fiduciary with an online portal can simplify tasks, ensuring secure and efficient fund administration and distributions. Furthermore, having a licensed fiduciary in charge instills confidence in stakeholders regarding the fund's assets, adherence, duties, and the protection of sensitive information.
On the other hand, entrusting settlement funds to an unlicensed administrator can pose real risks.
Without licensing and oversight, there is an increased risk of mishandling funds, not following regulations, and failing to protect information. Recent incidents involving trust administrators losing over $100 million in client funds are a stark reminder of the risks associated with unlicensed providers. This information is crucial for the audience to be cautious and aware.
Unlicensed providers often lack the expertise, controls, oversight, safeguards, and resources to accomplish complex administrative tasks effectively. These deficiencies can lead to delays, mistakes, and potential legal problems. Opting for an unlicensed administrator instead of a licensed fiduciary can expose the settlement and its stakeholders to unnecessary risks.
When selecting an administrator, consider their experience and expertise. Look for professionals with a proven administration track record tailored to your settlement needs. Ensure they understand the related tax regulations and are proficient in managing the requirements outlined in the U.S. Tax Code. Key considerations include:
We have highlighted the significance of having an administrator manage Qualified Settlement Fund administration tasks. With the best platforms, the administrator is responsible for creating the QSF, ensuring compliance with regulations, and overseeing the accurate distribution of funds. Their expertise is vital in maintaining settlement rights and ensuring tax compliance. Additionally, administrators work to preserve the fund's tax status, streamline settlement procedures, and expedite resolutions.
In conclusion, appointing a qualified administrator is essential, as they play a crucial role in ensuring a cost-effective, efficient, and compliant administration process.
Learn how a turnkey QSF platform like QSF 360 can provide an end-to-end QSF administration solution.
What is the purpose of utilizing a Qualified Settlement Fund? It administers the settlement and assists in resolving secondary disputes and liens. The QSF, a cornerstone in tax and financial planning, is managed by an independent third-party administrator, ensuring impartiality and fairness.
What are the key advantages of using a Qualified Settlement Fund? Employing a settlement fund offers several benefits, including providing swift resolution for defendants, enhanced financial safeguards, tax deferral benefits, and flexible structure options for attorney fees and claimants.
Can you explain what a Qualified Settlement Fund is? A Section 468B Qualified Settlement Fund is a statutory tax and purpose trust enabling plaintiffs to benefit from tax deferral options. Regardless of size, QSFs are beneficial in most lawsuits.
How are Qualified Settlement Funds taxed? The taxation is governed by Section 468B and its associated regulations. Each fund is assigned its own Employer Identification Number (EIN) by the IRS, and its tax treatment is based on its modified gross income, which excludes the initial deposit of funds, with taxes levied at a maximum rate of 35% only on its investment income (interest). In the world of disputes, Qualified Settlement Funds have emerged as a vital tool for handling litigation and simplifying the process of resolving claims.
Explore the legal & ethical implications of defamation law, including tax implications of legal settlements. Learn about plaintiff recovery trusts.
In the current digital and highly charged political age, the power of words has never been more salient. It has become an all-too-common place for words to be used as weapons for making untrue statements about a person or entity. A single untrue utterance can ripple through society, casting shadows of controversy and, sometimes, engendering significant legal implications. Untrue words (lies) have become an ugly weapon against adversaries in the public domain. This article ventures into defamation law, exploring the legal and ethical ramifications and the tax implications of an associated legal settlement.
Defamation is a tort comprised of the following elements: (i) a false statement of fact, (ii) that was published, and (iii) which publication causes harm to the reputation of the subject of the statement. The requisite standard of proof associated with the above-listed elements varies depending on the plaintiff’s status in society, as public figures are required to prove that the statements were made with actual malice. In ruling on a defamation suit, courts seek to balance the freedom of speech with protecting individual reputations.
Victims of defamation can pursue various civil causes of action aside from defamation claims, such as intentional infliction of emotional distress and loss of income. Some states have civil laws allowing defamation victims to seek compensatory and punitive damages.
Unfortunately, because of the “plaintiff double tax,” defamation victims suffer twice – first by the defamation itself and second by how their litigation recovery is taxed. The defamation offense is obviously worse, but double taxation remains an unfair outcome.
Commissioner v. Banks, 543 U.S. 426 (2005), is a Supreme Court case that addressed the question of whether, for federal income tax purposes, the taxable components of a judgment or settlement paid to a taxpayer’s attorney under a contingent fee agreement is taxable income to the taxpayer. The Supreme Court ruled that one hundred percent (100%) of the gross taxable portion of the litigation/settlement recovery constitutes the taxpayer’s income and explicitly includes the portion paid to the attorney as a contingent fee. The Court viewed the attorney as merely the plaintiff’s “agent,” thus, the proceeds were wholly those of the plaintiff.
The plaintiff double tax applies to many litigation claims, including those involving no physical injuries – such as defamation and punitive damages. Thus, as has been noted, the entire award is taxable income in those cases, but the related attorney fees are not deductible on the victim’s Form 1040 tax return. Having to pay taxes on the total value of the award where the related attorney fee is not deductible is the plaintiff’s double tax.
For example, assume a defamation victim lives in NYC and recovers $1,500,000 in non-physical injury and emotional distress damages and an additional $1,500,000 in punitive damages. The entire $3,000,000 gross settlement proceeds are taxable to the plaintiff, but none of the attorney fees are deductible.
In NYC, the combined Federal/State/Local income tax rate on this award is likely 50% (or more), and the attorney has a forty-percent (40%) contingency rate, so the plaintiff ends up with a net of only $300,000. (netting $300,000 after tax is only 10 cents on the dollar!) Now, add the litigation costs associated with the action that the plaintiff also bears, and the net recovery could be zero ($0) or even produce a negative after-tax net settlement. We can all agree that 10 cents on the dollar (or less) is not fair compensation for a ruined reputation.
A defamation victim seeking to avoid this unfortunate scenario created by Banks might consider a Plaintiff Recovery Trust (PRT), a specially designed trust that exists to hold the litigation claim. If there is a successful recovery, the PRT will significantly increase the net after-tax recovery, perhaps by 100% or more, depending on the recovery amount and where the defamation victim is domiciled.
To learn about PRTs, go to https://www.easternpointtrust.com/plaintiff-recovery-trust.
Understand the legal recourse for revenge porn victims and the tax implications of litigation recovery. Learn about Plaintiff Recovery Trusts for fair compensation.
It’s a sick, sad world where revenge porn exists. Litigation provides (inadequate) recourse. Making things worse - if possible - is the abysmal way a revenge porn victim (RPV) is taxed on their recovery.
Revenge porn is nonconsensual pornography. It includes intimate images taken with consent and distributed without the victim’s consent and explicit images taken without the victim’s knowledge. In some states, unlawful dissemination can include sexual images, intimate images, explicit images, or engaging in sexual acts where there is a reasonable expectation of privacy, with the intent to cause financial, physical, or emotional harm. Revenge porn is not rare – it’s estimated that 1 in 8 social media users in the U.S. are revenge porn targets.
RPVs can pursue various types of civil causes of action, including intentional infliction of emotional distress, invasion of privacy, and defamation. Some states have civil laws allowing RPVs to seek compensatory damages. Other states have specific laws allowing for a private cause of action against the person sharing the private images. For example, in Colorado, RPVs can seek monetary damages of $10,000 or the actual damages and attorney fees.
Revenge porn damages include reputational harm, emotional distress, pain and suffering, lost income, medical expenses, including mental health care, and punitive damages.
Unfortunately, because of the “plaintiff double tax”, an RPV suffers twice – first by the underlying violative action itself and second by how their litigation recovery is taxed. It’s obvious which is worse – but still.
The plaintiff double tax applies to many types of nonbusiness litigation cases, including those involving no physical injuries – such as defamation, non-physical injury, emotional distress, and punitive damages. The entire award is taxable income in those cases, but the related attorney fee cannot be deducted on the victim’s tax return. Having to pay taxes on the full value of the award where the related attorney fee is not deductible is the plaintiff's double tax.
To illustrate, assume an RPV living in NYC recovers $500,000 in non-physical injury/emotional distress damages and $1,500,000 in punitive damages. Her $2,000,000 settlement proceeds are taxable, but none of her attorney fees are tax deductible. By extension, if her combined Federal/State/Local income tax rate on this award is 50% and her attorney is owed the standard 40% contingency rate, she ends up with only $200,000 – 10 cents on the dollar! Now, add in the litigation costs borne by the RPV associated with the action, and the recovery could be as little as zero ($0) or even a negative net effect. We can all agree that it is not fair compensation for such a heinous act.
An RPV might consider a Plaintiff Recovery Trust (PRT), a specially designed trust that exists to hold the litigation claim. If there is a successful recovery, the PRT will significantly increase the RPV’s after-tax recovery, perhaps by 100% or more, depending on the recovery amount and where the RPV lives.
To learn about PRTs, go to https://www.easternpointtrust.com/plaintiff-recovery-trust.
A Plaintiff Recovery Trust can reduce the plaintiff double tax on her $83.3 million from a defamation case against Donald J. Trump.
As you may know, E. Jean Carroll was recently awarded $83.3 million in her defamation case against former President Donald J. Trump. After the case, Ms. Carroll quipped to Rachel Maddow on MSNBC: “I have such great ideas for all the good I’m going to do with this money,” “First thing, Rachel, you and I are going to go shopping.” “We’re going to get completely new wardrobes, new shoes, motorcycle for Crowley, new fishing rod for Robbie. Rachel, what do you want, a penthouse?” She also said that “We’re going to do something good with it.”
Unfortunately, because of the tax laws, particularly the “plaintiff double tax”, Ms. Carroll may need to limit where she shops to have any money left to do good.
The plaintiff double tax applies to many types of nonbusiness litigation cases, including those involving no physical injuries – such as defamation - and punitive damages. In those cases, the entire award is taxable income (not just the net after attorney fees). Furthermore, the related attorney fees cannot be deducted on Ms. Carroll’s 1040. Having to pay taxes on an award where you cannot deduct the related attorney fee expense is the plaintiff’s double tax.
The jurors awarded Ms. Carroll $7.3 million in compensatory damages for emotional harm, $11 million in compensatory damages for harm to her reputation, and $65 million in punitive damages. All of these amounts are taxable and subject to the plaintiff’s double tax.
Assuming Ms. Carroll lives in New York City, her combined Federal/State/Local income tax rate on this award would be about 51%. Thus, if her attorney is owed the industry standard 40% contingency rate, then of Ms. Carroll’s $83.3 million award, she’d end up with only $7.5 million – just nine (9) cents on the dollar! That does not leave much for shopping or doing good, especially in NYC.
The same taxation applies if her award is reduced on appeal. Say she receives $20 million after appeals or a settlement. Due to the plaintiff's double tax, she’ll end up with about $2 million, or ten (10) cents on the dollar. (Don’t buy that NYC penthouse yet.)
Mr. Trump has indicated that he will appeal, so the case is not final. This gives Ms. Carroll time to do some planning to reduce the taxes on any award she does ultimately receive.
It may be wise for Ms. Carroll to consider a technique known as the Plaintiff Recovery Trust (PRT). A PRT is a specially designed trust that could more than triple her after-tax recovery. For Ms. Carroll (and you) to learn more about PRTs, see our overview on the Plaintiff Recovery Trust.
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
FOR IMMEDIATE RELEASE
[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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