Asbestos Trust Funds

Trust funds allow asbestos exposure victims to receive financial compensation. Companies that made asbestos products established these trust funds after lawsuits and scientific research linked asbestos to deadly diseases. Those who developed mesothelioma or other asbestos-related diseases may be able to access these trust funds, which contain over $30 Billion as of 2020.

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What Is an Asbestos Trust Fund?

An asbestos trust fund is a portion of money set aside by a company that made and/or sold asbestos products. These trust funds allow those who developed asbestos-related diseases and cancers to receive money for their medical care.

From the 1930s to the early 1980s, hundreds of companies produced asbestos-containing products and made millions in the process. Though these companies knew asbestos could cause lung damage and cancer, they concealed the truth for decades to keep making money.

Once the dangers of the mineral became widely known, companies that made asbestos products faced hundreds of thousands of lawsuits from victims. In response, many companies filed for bankruptcy and created asbestos trust funds.

Asbestos trust funds are managed by a group of trustees who manage how much the fund will pay. These trustees also ensure the fund can continue to operate year after year.

Active Abestos Trust Funds

As of 2020, roughly 60 asbestos trust funds across the United States still award payments.

Families affected by any asbestos-related disease should find out whether they are able to access money through a trust fund.

Asbestos Trust Funds and Mesothelioma

Asbestos exposure can cause many diseases, including mild pleural plaques and deadly cancers such as mesothelioma. Asbestos trust funds award higher amounts of compensation to those with more serious illnesses.

Mesothelioma spreads aggressively, is hard to diagnose, and has no cure. Those diagnosed with this rare form of cancer receive the highest amount of compensation from asbestos trust funds.

Quick Facts About Asbestos Trust Funds

  • Asbestos trust funds group claims into two categories: malignant (cancerous) and nonmalignant (non-cancerous). Malignant claims typically pay more than nonmalignant claims.
  • According to a 2010 report from the Rand Institute for Civil Justice, asbestos trust funds pay an average of $180,000 for mesothelioma claims. The value can vary greatly depending on the trust fund.
  • Both victims and their families can receive financial compensation through asbestos trust funds.
  • Asbestos trust funds can award compensation much faster than filing a lawsuit. However, the payout might be lower.

Benefits of Asbestos Trust Funds

Unquestionably, the biggest benefit of asbestos trust funds is that victims receive financial compensation for their treatments.

Mesothelioma requires specialized treatment from expert doctors, and these costs of care can quickly add up. Through a trust fund, families can recover some of these expenses and avoid a financial catastrophe.

Asbestos trust fund settlements can help pay for: 

  • Lost wages for those who can no longer work
  • Medical treatments, such as surgeries and medication
  • Travel expenses
  • Other costs, including funeral expenses

Another benefit of asbestos trust funds is that they were designed to last for decades at a time, meaning both current and future victims of asbestos-related diseases may be able to receive compensation.

Mesothelioma and other asbestos-related diseases typically take 20-50 years to develop after first exposure. Due to this, asbestos companies had to set aside extra money to cover those who may develop asbestos-caused cancer in the future.

Further, asbestos trust funds may allow families to receive compensation in a relatively short amount of time. While other options to receive compensation (such as a lawsuit) may award a family with more money, it can take much longer.

For example, it may take a few years for a mesothelioma lawsuit to conclude if it goes to trial before a jury. On the other hand, those controlling asbestos trust funds want to resolve claims quickly and award families with compensation.

Who Can Access Asbestos Trust Funds?

Those who developed mesothelioma or other asbestos-related diseases may be able to access asbestos trust funds if they meet the right criteria.

Those who can access asbestos trust funds include:

  • Victims: Anyone who has developed an asbestos-related disease, including mesothelioma or other cancers, can seek compensation through asbestos trust funds.
  • Family members: A victim’s family or loved ones can file a claim with a trust fund if the affected person is too weak to do so or has died due to their illness.
  • Secondhand asbestos exposure victims: Those who lived with people who worked in the asbestos industry may have also been exposed and can file a claim if they developed an asbestos-related disease.

Anyone looking to receive money from a trust fund should work with an experienced asbestos lawyer who has handled these cases before.

Trust funds can only be accessed through the legal system, and asbestos attorneys know how to build strong claims that explain how companies caused a worker’s condition.

Proving Past Asbestos Exposure

Those who want to access asbestos trust funds must prove how, when, and where they were exposed to asbestos and how this caused them to develop a serious disease. This requires the gathering of evidence.

Evidence required to file a trust claim usually includes:

  • Diagnosis: The affected person must be diagnosed with mesothelioma or another asbestos-related disease by a doctor.
  • Physician Statement: A written notice gives a doctor’s insight on the patient’s condition and how it developed, giving a claim more credibility.
  • Asbestos Exposure: It’s important to figure out how someone was exposed to asbestos. People may have been exposed from household products, their job, or secondhand exposure from relatives. How someone was exposed can help determine which companies may be responsible.
  • Extent of Asbestos Exposure: While even a single exposure to asbestos fibers can cause mesothelioma, those exposed to asbestos over a long period of time (months or years) may have stronger claims.

An asbestos attorney can help families gather this evidence and build a strong asbestos trust fund claim.

Accessing Multiple Trust Funds

As an asbestos lawyer builds a case, victims may be able to file against several asbestos companies with trust funds if they worked in multiple jobs that exposed them to this deadly material.

Also, many companies worked together to make and sell asbestos-containing products. As a result, more than one asbestos company may be responsible for a victim’s asbestos-related disease.

Attorneys can examine each person’s case and determine how many companies could be held accountable.

Steps to Filing an Asbestos Trust Fund Claim

Successful asbestos trust fund claims are filed by skilled mesothelioma lawyers and reviewed by a board of trustees. Below, find a step-by-step breakdown of the asbestos trust fund process.

File the Claim

After a victim contacts an asbestos lawyer, they will work together and build a claim that outlines when and how the exposure occurred. From there, the lawyer files a claim with the appropriate trust fund.

If the lawyer determines that more than one company is responsible, several different claims may be filed.

Claim Review

After the claim is filed, the asbestos trust fund’s board of trustees review it and determine its validity.

Claims against asbestos trust funds are reviewed in two ways:

  • Expedited review: Through this review process, the board of trustees uses a set of predetermined criteria that look at a person’s work history and current illness. If the claim meets these criteria, the trust will quickly distribute compensation.
  • Individual review: With this option, the trust takes an in-depth look at a claim and awards a value based on the claimant’s unique circumstances. Those who choose this review process often do so to try to receive more money than they would with an expedited review.

The victims and their families choose which method the board of trustees will use to review the claim with guidance from their legal team. The trustees then determine whether the claim meets the criteria to receive a payout.

Claim Liquidation

If the trustees determine the claim is valid, they then determine its value (liquidation).

Claims filed under the expedited review process receive a value based on standards established by the trust. Individually reviewed claims determine a value by looking at previous claims with similar circumstances.

During this stage, some claims are reclassified as extraordinary claims. Extraordinary claims go through the expedited review process but end up with a higher case value. This typically occurs if the victim presents extremely strong evidence.

For example, if someone worked for 40 years in a warehouse owned by an asbestos company — and developed mesothelioma — their case may be classified as an extraordinary claim.

Payment

After the claim is assessed, the board of trustees will make a financial offer to the victim and their attorneys. The victim may or may not choose to accept the offer.

If they accept, they will receive their financial award based on the trust’s payment schedule. The payment is usually received in smaller amounts over a long period of time and not all at once.

If a victim rejects the trust’s offer, alternatives to resolve the dispute will be considered. In rare cases, a victim can file a mesothelioma lawsuit against the trust to get compensation, but most disputes are resolved before this happens.

How Much Trust Fund Money Can I Receive?

How much money someone receives from an asbestos trust fund depends on a few different factors.

These factors include: 

  • How much evidence the victim has (such as asbestos exposure history, medical records, etc.)
  • The asbestos-related disease the victim developed
  • How much money is in the trust fund when the claim was filed

Trust fund amounts can vary significantly based on these factors. While one person may receive millions of dollars for their condition, another may only qualify for a few thousand. An experienced lawyer can help estimate specific case values.

Access Asbestos Trust Funds

Compensation for treatment, loss of income, and other damages is available through asbestos trust funds.

Find Out If You Qualify

Asbestos Trust Fund Payouts

The payout that claimants (the victims who file claims with asbestos trusts) receive from a trust fund will depend on the particular trust they access. All asbestos trust funds set their own compensation amounts and payment schedules.

Asbestos Trust Fund Payment Percentages

It can take decades before symptoms of asbestos-related diseases develop. For this reason, asbestos trust funds must continuously operate to make sure everyone — including future victims — receives compensation.

The trustees’ overall goal is to make sure that the trust funds do not run out. In turn, some trust funds created payment percentages to ensure they have money for future claimants.

Trust Fund Payment Percentages

Payment percentages vary for each trust. Some asbestos trust funds actually pay the full amount, while others pay as little as 1% of a claim’s overall value.

Low payment percentages can greatly impact the value of a claim. For example, if a claimant was awarded $100,000 through a trust with a payment percentage of 1%, they would only receive $1,000 in total.

Payment percentages can change over time, so it is crucial to file a claim as soon as possible. The payment percentage can decrease overtime to make sure there is enough money to pay future claimants.

Recent Asbestos Trust Fund Settlements

Trust fund settlements continue to pay families to this day, with specific values varying depending on trust size, payment percentages, and other factors.

Recent trust fund values (before payment percentages) included:  

  • $350,000 from the Manville trust
  • $225,000 from the U.S. Gypsum trust
  • $215,000 from the Owens Corning trust
  • $104,000 from the Kaiser asbestos trust

All the above values are for mesothelioma claims. While these initial values seem high, they do not always reflect what victims actually receive.

According to a 2012 Reuters report, the Manville trust placed a low payment percentage (7.5%) on its payouts after a high influx of claims in 2011. This means a $350,000 claim would actually pay out just $26,250. The trust originally paid in full.

How Were Asbestos Trust Funds Created?

Companies establish asbestos trust funds after they declare bankruptcy and set aside money to ensure as many people as possible can receive the highest amount of compensation. The trust fund process is regulated by the U.S. Bankruptcy Code.

The trust creation process involves: 

Bankruptcy Court

The first step in creating an asbestos trust fund is for a company to petition for Chapter 11 bankruptcy. Once a company has declared bankruptcy, it can no longer be sued.

Asbestos Companies and Bankruptcy

Bankruptcy allows a company to redirect any pending lawsuits to the trust fund, as opposed to the company itself. Trusts are typically established in bankruptcy court as part of the company’s plan for reorganization.

Often, bankruptcy was the best option for asbestos companies due to the high volume of claims, according to the RAND Institute for Civil Justice. By 2007, almost all major asbestos manufacturers in the United States had declared bankruptcy.

Estimates for Asbestos

As part of the company’s plan for reorganization, the company will provide an average estimate for asbestos-related disease claims. This allows them to establish an expedited review process by outlining a set of criteria — and associated values — for potential claims.

The U.S. Bankruptcy Code specifies that people with mesothelioma and other cancers (like lung cancer) should receive more money than other asbestos-related diseases.

Reorganization Approval

Once the asbestos company has submitted its plan for reorganization, it is up to the courts to decide whether or not to approve the plan.

The following conditions must be met before the plan is approved: 

  • The trust will pay current and future asbestos claims
  • The trust will use the bankrupt company’s money to pay the claims
  • The trust funds come from securities or debt of the old company
  • The trust controls most of the voting stock of the company or its parents/subsidiaries
  • All claims are roughly valued and paid the same way
  • The plan is approved by a 75% vote of current claimants in terms of number
  • The plan is approved by a 66% vote in terms of claim value
  • A representative for future claimants is appointed

If all of these conditions are met, the trust will be established, and all pending lawsuits against the bankrupt company cease. Since the bankrupt company can no longer be sued, those who wished to file a lawsuit must submit claims with the trust fund.

Limitations on Filing a Trust Fund Claim

Asbestos trust fund claims are an important asset to families, but some limits exist. See how other claims and local laws impact how claims are filed.

Filing Other Claims and Lawsuits

Depending on each person’s specific case, they may decide to take other forms of legal action in addition to filing a trust fund claim. That being said, other legal actions may impact the ability to file a trust fund claim and vice versa.

Two notable aspects that can affect claim values are: 

  • Information sharing: Some states require those suing to note any trust fund claims that were filed prior to the lawsuit. In addition, some trust claims must be filed before a lawsuit or trial.
  • Set-offs: Sometimes, a person may decide to take legal action in other forms after already receiving payment from a trust fund. In these cases, the money a person received from the trust fund may be subtracted from the awards they win from a lawsuit or a settlement. This subtraction process is known as a set-off. Set-offs vary by state.

Experienced lawyers can determine how other claims or lawsuits can impact the value of a specific case.

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Statutes of Limitations

Statutes of limitations are strict rules about the period of time when someone can take legal action for asbestos claims. These statutes vary by state, with most limiting legal action to a few years after someone is diagnosed with an asbestos-related disease.

However, statutes of limitations in asbestos-related cases can be complex. For example, if someone was exposed to asbestos in a different state from where they currently live, they may have to file their lawsuit within the former state’s statutes.

Those looking to take legal action cannot do so after the statute of limitations has passed.

To determine when to take legal action, consult with an experienced asbestos lawyer. These lawyers can identify the statutes of limitations in your case and identify the best time to file a claim.

Asbestos Trust Fund Legislation

Though first established in the 1980s, asbestos trust funds still play a crucial role in providing compensation today. As a result, U.S. lawmakers constantly monitor the issue and pass new laws that affect how victims can receive compensation.

Important pieces of asbestos trust fund legislation include: 

  • Section 524 of the Bankruptcy Code: In 1994, Congress amended Section 524 of the bankruptcy code to allow asbestos companies to form a trust and shield them from continuous lawsuits.
  • The FACT Act: This act, introduced in 2017, would require asbestos trust funds to submit quarterly reports to the bankruptcy court that list all payments made to claimants. This would prevent fraud, though opponents said incidents of fraud are rare. The act has stalled as of 2017.

Though no action has been taken on the FACT Act in recent years, other government agencies are taking action to prevent fraud.

For example, the Department of Justice announced in September 2018 that it would investigate Kaiser Gypsum Company after it attempted to establish a new asbestos trust fund. The DOJ expressed its concern that asbestos trust funds have paid fraudulent claims in recent years.

Asbestos Trust Fund List

As of 2020, nearly 60 companies currently have active asbestos trust funds.

Notable asbestos trust funds include:

  • U.S. Gypsum Company: Established in 2006 with $3.95 Billion
  • Owens Corning: Established in 2006 with $3.42 Billion
  • Johns-Manville: Established in 1988 with $2.5 Billion
  • Armstrong World Industries: Established in 2006 with $2.06 Billion
  • Babcock and Wilcox: Established in 2006 with $1.84 Billion
  • Owens Corning: Established in 2006 with $1.55 Billion
  • Combustion Engineering: Established in 2006 with $1.24 Billion
  • Kaiser Aluminum: Established in 2006 with $1.22 Billion
  • Eagle-Picher Industries: Established in 1996 with $730 Million
  • Federal-Mogul: Established in 2007 with $635 Million
  • National Gypsum Company: Established in 1993 with $446 Million

Companies With Asbestos Trusts

To see all companies that have established trusts, consult our full list of asbestos trust fund companies.

The Johns-Manville Corporation

The Johns-Manville Corporation, one of the most notable asbestos companies, was also one of the first to establish an asbestos trust fund.

The company faced a mountain of lawsuits in the early 1980s after hiding diagnoses of asbestos-related diseases from employees during routine health screenings. In response, the company filed for Chapter 11 bankruptcy and established the Manville trust.

Though the Manville trust initially tried to pay victims the full value of the claim, the overwhelming volume of claims drained the trust of all its money by the early 1990s.

Another restructuring in 1995 allowed the trust to stay afloat and established many of the major rules that govern asbestos trust funds today, such as paying more money to claimants with mesothelioma.

Get Help With Filing an Asbestos Trust Fund Claim

Asbestos trust fund claim amounts can vary depending on the company or companies you worked for, what asbestos-related diseases you developed, and when you decide to take legal action.

Since illnesses like mesothelioma have a relatively short life expectancy, it is important to take action sooner rather than later.

To learn more about filing an asbestos trust fund claim, get a free legal case review today. Our Justice Support Team will help you understand your options and answer your questions.

Author:Stephanie Kidd

Editor-in-Chief of the Mesothelioma Justice Network

Stephanie Kidd

Stephanie Kidd works tirelessly as a dedicated advocate for the vulnerable and underrepresented. Stephanie worked as a copywriter for an agency whose focus was communicating safety procedures on construction work sites. With her extensive background in victim advocacy and a dedication to seeing justice done, Stephanie works hard to ensure that all online content is reliable, truthful and helpful.

Last modified: January 21, 2020

View 4 Sources
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  2. Conlin, M. (2019, December 19). Special Report: Why big business can count on courts to keep its deadly secrets. Retrieved January 7, 2020, from https://www.reuters.com/article/us-usa-courts-secrecy-lobbyist-specialre/special-report-why-big-business-can-count-on-courts-to-keep-its-deadly-secrets-idUSKBN1YN1GF.
  3. Rand Institute for Civil Justice. (2010, July 26). Asbestos Bankruptcy Trusts: An Overview of Trust Structure and Activity with Detailed Reports on the Largest Trusts. Retrieved January 7, 2020, from https://www.rand.org/content/dam/rand/pubs/technical_reports/2010/RAND_TR872.pdf.
  4. U.S. Department of Justice. (2018, October 31). Justice Department Files Statement of Interest in New Asbestos Trust Proposal. Retrieved January 7, 2020, from https://www.justice.gov/opa/pr/justice-department-files-statement-interest-new-asbestos-trust-proposal.
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