Asbestos Trust Funds

Asbestos trust funds allow victims of asbestos exposure to receive compensation. Manufacturers of asbestos-containing products were forced to establish these special trusts as part of court-ordered bankruptcy deals. Those who have been diagnosed with mesothelioma may be able to access trust funds through a legal claim. An estimated $30 Billion has been set aside for asbestos exposure victims.

Free Mesothelioma Justice Guide

What Is An Asbestos Trust Fund?

An asbestos trust fund is a portion of money set aside by a bankrupt manufacturer that made and/or sold asbestos-containing 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 manufacturers produced asbestos-containing products and made billions in the process. Though these manufacturers 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, these manufacturers faced hundreds of thousands of lawsuits from victims. In response, many filed for bankruptcy.

By filing for bankruptcy, these manufacturers had one of two options:

  • They could go out of business
  • They could set aside money in a trust fund to pay current and future victims of asbestos exposure

Bankrupt manufacturers that established trust funds were shielded from current and future asbestos-related lawsuits. Anyone looking to file a lawsuit with these companies must instead file a claim with the asbestos trust funds that they established.

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.

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

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

The biggest benefit of asbestos trust funds is that victims receive financial compensation.

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

This compensation is very important because mesothelioma is often very expensive. The medical treatments alone can cost $400,000-$600,000 — or more.

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

Further, asbestos trust funds may allow families to receive compensation in a relatively short amount of time. Those controlling asbestos trust funds want to resolve claims quickly and award families with compensation if it is deserved.

Asbestos Trust Funds and Mesothelioma

Asbestos exposure can cause many diseases, including mild pleural plaques and deadly cancers such as mesothelioma.

Mesothelioma spreads aggressively, is hard to diagnose, and has no cure. Additionally, mesothelioma and other asbestos-related diseases typically take 20-50 years to develop after first exposure.

Due to this, the manufacturers of asbestos-containing products had to set aside extra money to cover those who may develop asbestos-caused illnesses in the future.

Those diagnosed with mesothelioma receive the highest amount of compensation from asbestos trust funds.

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 provided they used the asbestos-containing products listed under the trust.
  • Family members: A victim’s family or loved ones may be able to 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 be able to file a claim if they developed an asbestos-related disease. People who worked around asbestos-containing products may have unknowingly put their loved ones at risk since asbestos fibers could stick to clothing, hair, and skin.

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 manufacturers caused a victim’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: This 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 to asbestos from dangerous products, at their job, or through econdhand exposure from relatives. How someone was exposed can help determine which manufacturers 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, they may identify multiple asbestos trust funds that a victim can access. This depends on what asbestos-containing products the victim was exposed to.

Oftentimes, victims were exposed to asbestos-containing products made by a number of different companies. As a result, more than one manufacturer may be responsible for a victim’s asbestos-related disease.

Did You Know?

Some victims have been able to receive compensation from 30 or more asbestos trust funds.

Lawyers can examine each case and determine which asbestos trust funds someone qualifies for.

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

Consult Our Full List of Asbestos Trust Fund Companies

The Johns-Manville Corporation

The Johns-Manville Corporation, one of the most notable manufacturers of asbestos-containing products, 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 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 (the victims who file claims with asbestos trusts) with mesothelioma.

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

First, a victim must contact an asbestos attorney who can build a claim outlining when, where, and how the exposure occurred. The lawyer also identifies which manufacturers of asbestos-containing products are responsible and if they have established trust funds.

From there, the lawyer files a claim with the appropriate trusts.

Claim Review

After the claim is filed, the asbestos trust fund’s board of trustees review it and determines if it is valid.

Claims against asbestos trust funds are reviewed in two ways:

  • Expedited review: Through this review process, the board of trustees uses a set of criteria — including the claimant’s illness and what asbestos-containing products they were exposed to — to evaluate a claim.
  • 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.

Claim Liquidation

If the trustees determine the claim is valid, they then determine how much money will be paid out through a process known as liquidation.

Claims filed under the expedited review process receive a value based on standards established by the trust. Individually reviewed claims are valued 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.

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

Trust fund amounts can vary significantly based on these factors. An experienced lawyer can help estimate specific case values.

Asbestos Trust Fund Payouts

The payout that claimants receive from a trust fund will depend on the particular trusts 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 have enough money 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.

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. As previously mentioned, the trust originally paid in full.

How Are Asbestos Trust Funds Created?

Manufacturers of asbestos-containing products establish 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.

Learn more about the asbestos trust fund creation process below.

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.

Through Chapter 11 bankruptcy, a manufacturer of asbestos-containing products is allowed to repay its debts without actually shutting down.

Often, Chapter 11 bankruptcy was the best option for manufacturers of asbestos-containing products due to the high volume of lawsuits they faced. By 2007, almost all major asbestos manufacturers in the United States had declared bankruptcy, according to the RAND Institute for Civil Justice.

Estimates for Asbestos

As part of a manufacturer’s plan for reorganization, they 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 manufacturer 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 manufacturer’s money to pay the claims
  • The trust funds come from securities or debt of the manufacturer
  • The trust controls most of the voting stock of the manufacturer 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 manufacturer cease. Since the bankrupt company can no longer be sued, those who wished to file a lawsuit must an asbestos trust fund claim instead.

Limitations on Filing a Trust Fund Claim

Asbestos trust fund claims are an important asset to victims and their families, but some limits exist. Get more information below.

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 verdict or 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.

Statutes of Limitations

Statutes of limitations are strict rules about the amount of time someone has to file an asbestos trust fund claim. 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.

Did You Know?

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

Asbestos trust funds still play a crucial role in providing compensation today. As a result, U.S. lawmakers monitor the trusts 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 so manufacturers of asbestos-containing products had to form trust funds if they declared for bankruptcy.
  • The FACT Act: This act, introduced in 2017, would require asbestos trust funds to submit quarterly reports to the bankruptcy court that listed all payments made to claimants. It was intended to 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.

Get Help With Filing an Asbestos Trust Fund Claim

Asbestos trust fund claim amounts can vary depending on what asbestos-related diseases you developed, which manufacturers of asbestos-containing products are to blame, and when you decide to take legal action.

Since illnesses like mesothelioma can limit your life expectancy significantly — and cost half a million dollars or more to properly treat — it is important to take action sooner rather than later.

Through an asbestos trust fund claim, you can:

  • Afford expensive medical treatments
  • Hold the manufacturers that harmed you financially accountable
  • Provide for your family’s economic needs

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.

Mesothelioma Support Team
Stephanie KiddWritten by:

Editor-in-Chief

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.

View 4 Sources
  1. Berkowitz, B. (2012, May 11). Special Report: The long, lethal shadow of asbestos. Retrieved January 7, 2020, from https://www.reuters.com/article/us-usa-asbestos-lawsuits/special-report-the-long-lethal-shadow-of-asbestos-idUSBRE84A0J920120511.
  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.
Back to Top