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Qualified Settlement Funds  A Legal and Financial Analysis Showing Why They Can Be So Beneficial To You and Your Client


Author:  Matthew L. Garretson.; Peter H. Wayne, IV.


Source: Volume 21, Number 02, November/December 2007 , pp.16-24(9)




Journal of Taxation and Regulation of Financial Institutions

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Abstract: 

In a world where the average individual believes the IRS is rarely on his or her side, QSFs are the exception. Qualified Settlement Funds (“QSFs”) were established to enable claimants and defendants to determine how and when settlement funds are taxed and deductions obtained. Further, they are a valuable settlement tool whereby claimants can address critical settlement-related issues without the stress of settlement negotiations, because they release defendants from alleged tort (or other) liability through the doctrine of novation. QSFs, therefore, are both a useful settlement tool and asset providing unique tax benefits to claimants and defendants alike.

Keywords: Taxation of settlement funds; lien resolution

Affiliations:  1: The Garretson Law Firm; 2: The Garretson Law Firm.

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