Moneyzine
Contents
/Personal Finance/Qualified Settlement Fund (QSF)

Qualified Settlement Fund (QSF)

Moneyzine Editor
Author: 
Moneyzine Editor
1 mins
September 25th, 2023
Advertiser Disclosure

Definition

The term qualified settlement fund refers to a trust or fund created through state law to hold the proceeds from a settlement. Qualified settlement funds are oftentimes associated with class action lawsuits.

Explanation

Also referred to as a qualified settlement trust and 468b fund, a qualified settlement fund (QSF) is an agreement structure that simplifies lawsuit settlements. Authorized by Treasury Regulation 1.468B-1(c), which states the fund must satisfy the following:

  • It must be approved by a federal or state agency, and will be subject to the continuing jurisdiction of that agency.

  • It will resolve or satisfy claims that result from an event claiming liability.

  • It must arise out of a tort, breach of contract, or violation of a law.

  • The fund must be a trust under applicable state law.

Qualified settlement funds allow defendants to end litigation, while providing plaintiffs with access to assets. Defendants provide funding to the trust; however, they cannot participate in its administration. One of the benefits of these trusts is that it relieves both parties of the demands of the litigation process, while creating an opportunity to address post-litigation issues.

Defendants will oftentimes agree to the creation of a QSF so their organization is released from additional claims associated with the lawsuit as well as the benefit associated with an immediate tax deduction for the expense associated with funding the trust.

Related Terms

Related Content

  • What Can Help You Meet Your Budget While Shopping for Important Items?
    Budgeting while ensuring you don't compromise on quality can seem daunting. Whether filling your pantry, updating your wardrobe, or keeping up with the latest tech, smart shopping strategies are crucial for keeping your finances in check.
    April 2nd, 2024
  • How to Make a Million Dollars in 10 Years
    Truthfully, this title should actually be “How to Make a Million Dollars in 10 Years Without Going Into Debt", but that is just getting a little too winded for my liking. It’s true though!
    November 5th, 2024
  • How to Apply Maslow’s Hierarchy to Your Money This Year
    You might vaguely remember your psychology teacher talking about Maslow. He pointed at a picture of a triangle as you nodded off in the back of the school room.
    November 5th, 2024
  • How to Tackle Multiple Savings Goals
    When there’s only so much money to go around, there are often multiple savings goals competing for your money. Think of the young professional who’d like to get a more reliable car, buy a house, and save for retirement. Or consider the young family that’s saving for college, retirement, and a bigger house.
    March 22nd, 2024
  • The Countdown to Early Retirement: 10 Expenses to Eliminate
    Dreaming of waving goodbye to the daily grind five years ahead of schedule? The road to early retirement is paved with more than good intentions; it requires a meticulously crafted strategy with surprising twists. It's not solely about what you should be doing—like diligently saving a portion of your income or investing wisely—but also about what you need to stop doing.
    March 22nd, 2024

Contributors

Moneyzine Editor
The Moneyzine editorial team consists of writers and content specialists with diverse backgrounds.
Moneyzine 2024. All Rights Reserved.