by John Darer® CLU ChFC CSSC RSP
New York attorneys who go the route of submitting a petition at the end of a wrongful death case to obtain a "quick pay order" (so they can be paid before the Surrogate approves a distribution plan) need to be aware of the difficulties it creates for a client or clients who need to or want to structure a portion of their recovery. This problem does not arise where the attorney simply goes straight to the Surrogate.
With the typical "quick pay order" the recovery is Ordered to be paid to a separate interest-bearing escrow account from which the attorney can draw his fees. The typical "quick pay order" provides that none of the remaining funds may be withdrawn until the Surrogate approves a distribution plan.
The dilemma for the attorney is that without a fix, there is the potential for the immediate or subsequent perception that the law firm is more interested in its fees than the settlement planning issues of its own clients. Cognizant of the delicate balance between the law firm's duty to clients and the law firm's own needs, a solution is needed.
The attorney may wish to consider the use of the 468B QSF Solution where the same result could be achieved (i.e. the attorney can be paid right away), the Surrogate controls the distribution from the QSF and the distributees have the ability to structure.
Requirements to Establish a QSF
Approval Requirement Per Treasury Regulation 1.468B-1(c)(1), a QSF must be established by an order (or be approved by) the United States, any state (including the District of Columbia), any territory, any possession, any political subdivision, or agency or instrumentality of the foregoing (including courts) AND the QSF must be subject to the continuing jurisdiction of that governmental authority
The Resolve or Satisfy Requirement The QSF must be established " to resolve or satisfy one or more contested or uncontested claims that have resulted or may result from an event (or related series of events) that has occurred and that has given rise to at least one claim asserting liability (Treasury Reg. 1.468B-1(C)(2))
The State Law Requirement
The fund, account, or trust must be a trust under state law, or its assets must be otherwise segregated from the transferor's (or related persons') other assets (Treasury Reg. 1.468B-1(C)(3))
For further information concerning qualified settlement fund please call John Darer at 888-325-8640