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Qualified Settlement Funds

Through our partnership with Providio, Millennium’s Consultants can help identify cases that may require assistance with Qualified Settlement Fund administration. Providio's SQF administrator excel in accuracy, accountability and efficiency in the establishment and execution of trusts.

What is a Qualified Settlement Fund?

Qualified settlement funds (QSFs), also called Section 468B trusts or Section 468B funds, are often established as litigation enters its final stages. First used in the early 1990s in almost exclusively large class actions, QSFs are also used today in cases involving a few claimants.

The primary objective of a QSF is to operate as a tax-free holding point while organizing assets and determining which of the various plaintiffs and counsel receive which amounts. The QSF makes distributions to the appropriate recipients and then immediately winds down its existence.

Our QSF Administration Team Offers:

  • Accuracy: Our QSF administrators are experienced in every major aspect - from the establishment and execution of the QSF to the quick, efficient handling of all disbursement requests.
  • Accountability: Detailed reports accounting for all funds down to the penny are provided and you can rely on a human connection and a timely, thorough response.
  • Flexibility: Various service offerings are provided including sub-QSFs and payment direct-to-claimants to meet the needs of different matters.

Tax, Timing, and Planning Advantages

Plaintiff

  • Multiple claimants can use a QSF to time their receipt of income
  • Income is not taxable until the distribution is made from the QSF to the recipient(s)
  • Gives the plaintiff the time and flexibility to make key financial decisions without the pressures of litigation and before tax consequences attach to the money
  • Rather than the claimant receiving damage payments in a lump sum, the QSF may be used by the claimant to obtain a structured settlement annuity to provide tax-free income
  • Plaintiff counsel can also use the QSF to aid in structuring their contingency fee to obtain tax deferred income


Defendant

  • Transferring assets to a QSF releases the defendant from further liability
  • The defendant may immediately claim a tax deduction upon its transfer of assets to a QSF


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