Mesothelioma and Asbestos Trust Funds

What Is a Mesothelioma Trust Fund?

Asbestos manufacturers create mesothelioma trust funds as part of Chapter 11 bankruptcy protection. These trust funds provide future compensation for asbestos victims.

Key Facts About Mesothelioma Trust Funds:

Finding a lawyer with experience in asbestos trust fund claims is essential. They will gather the evidence needed to prove your exposure.

Who Is Eligible to File an Asbestos Trust Fund Claim?

Those with mesothelioma or other asbestos diseases are generally eligible to file a claim.

Workers exposed to asbestos by their employer via asbestos products are also eligible. This includes those exposed second hand, such as household members. Family members who lost a loved one from asbestos exposure can also file a claim.

List of Asbestos Trust Funds

Dozens of asbestos companies set up bankruptcy trust funds. These companies include Johns Manville, W.R. Grace and United States Gypsum. There are billions of dollars in these funds to compensate future asbestos victims.

The following chart shows some of the largest asbestos trusts available in the U.S. to mesothelioma patients and their families.

Compensation from Mesothelioma Trust Fund

The scheduled value for asbestos trust fund payouts ranges from $7,000 to $1.2 million, with a median value of $126,000. The median of the average value for mesothelioma claims is $180,000, but there is a large spread in the values. The differences in settlement values for mesothelioma claims pre-bankruptcy contribute to this wide spread.

Mesothelioma trust fund claims often pay six figures, according to a 2016 Mealey’s Asbestos Bankruptcy report. The amount of compensation a claimant can receive from an asbestos trust depends on several factors.

Each asbestos trust assigns claim values to various types of asbestos diseases. This “schedule” involves many factors. One example is how much the company paid before filing for bankruptcy.

Veterans are eligible for veterans’ benefits and claims. Those affected by asbestos also have other options for compensation. These include asbestos lawsuits, Social Security Disability Insurance and personal insurance.

How Much Money Is Left in Asbestos Trust Funds?

There is an estimated $30 billion left in asbestos trust funds. About 60 asbestos trust funds remain active. 

These trusts have paid claimants about $20 billion since the late 1980s. This figure includes an estimated $15 billion between 2006 and 2012, the most recent information available.

Asbestos-related diseases have a long latency period. New claims are likely to emerge for several decades. 

Trusts are established after rigorous estimation proceedings. These proceedings determine how much money should be set aside for current and future asbestos claims. Management procedures are established to ensure the funds last long enough to compensate future claimants.

To make sure enough money is available for future claims, claimants typically receive a percentage of what their claim is worth. This prevents funds from depleting too soon, but it also means that most victims get less than they might otherwise receive.

How Do Trust Fund Payment Percentages Work?

Trust funds offer a set payment percentage of a claim’s value to preserve money for future victims who will be diagnosed years from now.

For example, using the median value of $180,000 for mesothelioma claims, if the trust’s payment percentage is 25%, the payout would be $45,000. That compensation may be substantial enough to help cover medical bills and lost wages.

Filing an Asbestos Trust Fund Claim

Filing a trust fund claim involves several steps. The first step includes meeting the fund’s eligibility criteria. Next, your lawyer will gather the evidence before filing the claim. A mesothelioma attorney will guide you through these steps to give you peace of mind and let you focus on your recovery.

Step 1: Meet Trust Fund Criteria

Each asbestos trust fund sets its criteria that must be met to file a successful claim. The requirements are typically outlined on the trust fund’s website.

The criteria commonly include the following:

Step 2: Collect Evidence to Support Your Claim

You and your attorney will work together to gather evidence to support your claim. 

Evidence required to file an asbestos trust claim usually includes:

Step 3: Submit Your Claim

Once your attorney has gathered evidence, they will submit it per the trust’s protocols. Most trusts accept claims submitted through their websites. Others may require the submission of a printed claim through the mail.

Your attorney will find the best method to submit your claim to ensure a smooth approval process.

Step 4: Claim Reviewed for Approval

Asbestos trust funds have separate review processes for claims based on an individual’s asbestos exposure and particular life situation. Make sure to inquire with the trust’s administrators or ask your attorney to explain the process.

The trust’s administrators will review the evidence in your claim. This is typically done in one of two ways:

Claimants diagnosed with terminal diseases, such as mesothelioma, who need compensation fast may consider an extraordinary claim. An extraordinary claim is a good option for claimants who meet the criteria for an expedited review and whose exposure results from a single product or employer.

The settlement offered in this review may move to arbitration if the claimant is unsatisfied with the settlement amount. If arbitration fails, claimants have a right to sue the trust.

An experienced mesothelioma attorney has the expertise to know which type of asbestos trust fund review is likely to result in a better outcome for your case.

Filing Limitations for a Mesothelioma Trust Fund Claim

Before filing a trust fund claim, you must know all your legal options. A qualified mesothelioma lawyer can help you navigate through this process. They’ll determine if filing an asbestos trust fund claim is right for you.

How Are Asbestos Bankruptcy Trusts Created?

Mesothelioma trust funds are generally created through Chapter 11 bankruptcy courts. They comprise enough money to pay for future claims. Asbestos victims can file a trust fund claim rather than suing a company.  

Mesothelioma patients may be able to file claims against one or more trusts. The process requires medical records, often a physician statement and asbestos exposure summary. An experienced asbestos lawyer will provide a list of asbestos bankruptcy trusts. They can also help you navigate the trust fund process. Trust funds are available to help people with all types of asbestos-related diseases. Mesothelioma claims usually result in the highest compensation. 

Some companies didn’t have enough financial standing to establish a trust fund. They instead filed for Chapter 7 bankruptcy liquidation. Through reorganization, they sell off assets, and courts distribute money to claimants.

Companies Submit Plans to Bankruptcy Court 

Some companies can’t afford to pay asbestos liabilities. They must submit plans to a bankruptcy court for reorganization. These plans include how much will go into the trust for asbestos claimants and creditors.

Asbestos Claims Estimates Are Established

The court holds estimation proceedings, which resemble court trials. Each interested group estimates how much should go into the trust. They support their estimates based on the amount paid for prior asbestos claims. They also include testimony from experts. These legal experts are knowledgeable about the value of past asbestos lawsuit settlements.

Judge Considers Reorganization Plan

The bankruptcy judge weighs the evidence, including the estimates and expert testimony. The judge then determines how much money should be set aside for asbestos claims. It can take many years for the court to approve. Once approved, the company transfers the money to a trust fund, and a trustee manages the trust.

Trustee Manages the Fund 

An appointed trustee manages the trust and the claimant process. They ensure that enough funds are available to future victims. Trustees must provide annual reports on the financial state of the trust. 

How Asbestos Trust Fund Claims Compare to Other Mesothelioma Claims

Trust fund claims differ from lawsuits and VA claims. Although, they can still pay significant compensation to people injured by asbestos products. 

Compensation from lawsuits comes through settlements or jury verdicts. Trust funds protect bankrupt asbestos companies from future asbestos lawsuits. The trust fund handles future claims rather than the reorganized company.

VA claims are not legal claims. They offer compensation and health care to veterans of the U.S. armed forces and their families. A qualified mesothelioma law firm can help you determine your legal options.

Featured News Post

Honeywell to Fund Asbestos Trust With $1.3 Billion

To eliminate future funding obligations, Honeywell International Inc. has agreed to a one-time, lump sum payment of $1.325 billion to the asbestos trust…

Tim Povtak

11/28/2022

FACT Act and Asbestos Tort Reform

The federal government monitors asbestos trust funds and how they disburse money. The Furthering Asbestos Claim Transparency Act is one example. It has drawn criticism from plaintiffs’ lawyers and support from defendants’ lawyers.

The FACT Act would make asbestos trust funds report their payouts. Some state it would put claimants’ personal information in a public database. The bill stalled in the legislature in previous years. It has stalled without action since 2017.

DOJ Review of Trust Fund Claims

Since 2018, the U.S. Department of Justice has called for more accountability. The department has indicated that trust funds lack adequate safeguards. Such safeties would prevent fraudulent claims and mismanagement.

In September 2018, the department filed an official Statement of Interest. The filing came during the bankruptcy proceedings for Kaiser Gypsum Company. Shortly after, the department challenged the appointment of a Duro Dyne company trustee. They claimed the attorney was too conflicted to represent future claimants.

Common Questions About Asbestos Trust Funds

Will I need an attorney to file a mesothelioma trust fund claim?

While trust funds do not require you to have legal representation to file a claim, it is often in your best interest to hire an experienced mesothelioma attorney. Asbestos lawyers are familiar with the nuances of how each trust fund works and how to maximize your compensation.

What are the pros and cons of filing an asbestos trust fund claim versus a lawsuit?

The pros and cons depend on your individual case and whether you are eligible to file both types of claims. It is best to speak with a mesothelioma attorney to learn about the personal pros and cons that may affect whether you should file a mesothelioma lawsuit, trust fund claim or both.

Is asbestos trust fund compensation taxable?

Compensation from asbestos trust funds is generally tax-free. Still, only a mesothelioma attorney or tax expert can confirm whether you may owe taxes to the state or federal government resulting from such compensation.

How much is the average trust fund claim payout?

Each trust fund sets different payouts for asbestos-related diseases. While there is no average trust fund payout, it isn’t uncommon for mesothelioma patients to receive compensation totaling six figures after filing claims with multiple trust funds.

Can a family member file an asbestos trust fund claim?

Yes, the estate of someone who has died from an asbestos-related disease can file claims, such as wrongful death claims, with asbestos trust funds. A mesothelioma attorney can provide guidance on how to file a successful claim.