The Good Book: Robert W. Wood’s Qualified Settlement Funds and Section 468B

A qualified settlement fund is almost always the result of an exhaustive effort to settle a legal dispute. A fund provides valuable benefits and structure to all interested parties. It avoids or stops costly, time-consuming litigation; gives defendants a valuable “peace treaty”; guarantees the plaintiffs’ award; and compensates plaintiffs’ counsel for fees and expenses.

The foundation for these benefits is proper fund administration, and particularly full compliance with governing law and tax requirements. Robert Wood, a preeminent lawyer with the San Francisco firm of Wood and Porter and noted author of many legal texts, provides a comprehensive look at the details of QSF administration in his book “Qualified Settlement Funds and Section 468B.”

This book covers every aspect of forming, administering, and closing out a settlement fund. It includes specific recommendations on settlement stipulation language, settlement trust formation and administration, funds management, and the tax treatment of QSF receipts and disbursements. The sections on required tax filings, tax reporting, the tax treatment of attorney fees, and trustee administrator duties are invaluable for anyone who is forming—or who has formed—a qualified settlement fund.

A QSF’s value is in its unique confluence of law, regulation, and the Internal Revenue Code. Full compliance with each of these varied requirements is vital, as fund administration mistakes can be time-consuming and may reduce or eliminate benefits to plaintiffs and defendants. Wood’s book is an essential resource for anyone forming or administering a qualified settlement fund.

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               Lordan CPA | Eden Prairie, Minnesota | | 952 698 2044

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