Information for Trial Attorneys and their Clients

 

Why Do Plaintiff Attorneys Favor it?

Plaintiff attorneys favor Qualified Settlement Funds because they can control the settlement funds while negotiating medical liens, determining appropriate distribution amounts to their clients (in cash and in structured settlements), in Supplemental Needs Trusts to preserve Medicaid and Supplemental Security Income (SSI), structuring attorney fees, and planning for estate needs.

It also eliminates risk of insolvency by the defendant or its insurer and avoids interference or refusal of the defendant to participate in the structured settlement placement.

 

What Steps Must be Taken to set up a Qualified Settlement Fund?

The plaintiff or defense needs to have a simple release and check made payable to the (name of client) Qualified Settlement Fund.

One: A decision is made to set up a Qualified Settlement Fund. The administrator and an agency bank account is established.

Two: A petition, order and Qualified Settlement Fund are presented to a governmental entity so that the entity establishes the fund.

Three: Upon settlement of a claim, the defendant pays a lump sum to the fund in return for a release and discharge of the claim. While all other matters are being decided, the lump sum earns interest while it is in the trust.

Four: While the claim is being negotiated and settled, the administrator sets up a tax identification number for the fund.

Five: Once the settlement and allocation is agreed upon, the administrator gets court approval for minors and incompetents, arranges for payment of the attorneys and expenses, then meets with the claimants to discuss options such as structured settlements, special needs trusts, preserving government benefits and investments.

Six: Once all the financial decisions are decided and implemented, the administrator gets court approvals for the minors and incompetents, executes settlement agreements between the parties and the fund, prepares a tax return and closes the fund.

Is a Qualified Settlement Fund Right for Your Clients?
January, 2002 Trial Magazine