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Who Owns the Assets Within a Qualified Settlement Fund (QSF)?
July 3, 2024
Video
A qualified settlement fund - or QSF - is a tax tool often used in legal settlements. But who owns the assets within a QSF? According to IRS section 468B, subsection B3C, "the fund shall be treated as the owner of the property in the fund (and any earnings thereon)." Thus, the assets of a QSF are segregated and not owned by any defendant, plaintiff, lien holders, or plaintiff attorney.
A QSF is a statutory trust operated under Section 468B for the benefit of the plaintiffs and controlled by an independent administrator. To preserve tax compliance and qualification, the QSF must solely own the QSF's assets, which are under the control of the QSF administrator.
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