What Is an Asbestos Bankruptcy Trust Fund?
Asbestos trusts are special funds set up as part of bankruptcy proceedings to ensure money is available to compensate people diagnosed with mesothelioma and other asbestos-related diseases. Since 1988, trustees have distributed more than $17.5 billion to claimants, according to the U.S. Government Accountability Office and the RAND Corporation.
Researchers have documented a link between asbestos exposure and lung cancer since the 1920s, but it was not until the 1970s that a growing number of lawsuits were filed as people exposed to asbestos were facing diagnoses. By the 1980s, dozens of asbestos companies named in mounting lawsuits started declaring bankruptcy.
Today, 60+ active trust funds hold more than $30 billion for people diagnosed with asbestos-related diseases like mesothelioma. Congress has repeatedly considered bills that would require asbestos trusts to publish claim data, including the Furthering Asbestos Claim Transparency Act, but none have become law. Individual trusts still publish annual reports and their governing documents set their own rules for disclosure.
How Do Companies Create Asbestos Bankruptcy Trusts?
When an asbestos company files for Chapter 11 bankruptcy, it can’t simply walk away from its liability. Section 524(g) of the U.S. Bankruptcy Code requires the company to establish a trust funded with assets, including cash, stock and insurance proceeds, before a court discharges its debts. A federal bankruptcy judge must approve the trust and its payment structure.
Trust administrators set a payment percentage based on the fund’s total assets and the projected number of future claims. This percentage determines how much a claimant actually receives from a scheduled claim value, which is the full payout assigned to that disease type. Administrators periodically review and adjust the percentage to ensure the fund can pay both current and future claimants.
When trust assets run low, administrators reduce the payment percentage to keep the fund paying claims over time. In 2024, the U.S. Supreme Court’s decision in Truck Insurance Exchange v. Kaiser Gypsum reinforced insurance companies’ rights to participate in asbestos trust bankruptcy proceedings. This ruling continues to affect how some trusts manage their assets.
For people filing claims today, the practical impact is that trust administrators review payment percentages regularly. People who file sooner tend to access higher payment percentages before administrators reduce payouts.
Active Asbestos Trust Funds
As of 2026, more than 60 asbestos trust funds are open and accepting new claims. Johns Manville, W.R. Grace, Pittsburgh Corning, Armstrong World Industries and dozens of other manufacturers that used or sold asbestos-containing products established these trusts. The exact count shifts over time as new trusts form through ongoing bankruptcies and older trusts exhaust their assets and close. Our attorneys routinely file with multiple trusts a client is eligible for at the same time to help them cover diagnosis-related costs like medical expenses. Most people qualify for three or more trusts based on their exposure history.
| Trust Fund | Initial Funding | Payment % | Scheduled Value |
|---|---|---|---|
| Bondex International Trust | $797.5 million | 29.5% | $80,000 |
| DII Industries Trust (Halliburton) | $2.5 billion | 60% | $80,000 |
| Johns Manville Asbestos Trust | $2.5 billion | 5.1% | $350,000 |
| Quigley Company Asbestos Trust | $965 million | 13.3% | $200,000 |
| WRG Asbestos PI Trust (W.R. Grace) | $3 billion | 30.1% | $350,000 |
| NARCO Asbestos Trust | $6.32 billion | 12.2% | $75,000 |
| Federal-Mogul Trust | $2.1 billion | T&N Subfund: 3.9% / FMP Subfund: 12.2% | T&N Sub Fund: $200,000 / FMP Sub Fund: $100,000 |
Who Is Eligible to File an Asbestos Trust Fund Claim?
Anyone diagnosed with an asbestos-related disease who can trace their exposure history to a company with an active trust fund may be eligible to file a claim. Each trust fund sets its own eligibility requirements.
Criteria to Qualify for a Trust Fund Claim
- A confirmed medical diagnosis of mesothelioma or another asbestos-related disease
- A diagnosis that meets the trust’s specific disease criteria and exposure requirements
- Documentation that the company’s asbestos-containing product caused your exposure
- Exposure during a time period that the trust recognizes
Most trusts cover not only mesothelioma but also lung cancer, asbestosis, pleural plaques and other asbestos-related diseases. Mesothelioma claims usually receive the highest scheduled values, but people diagnosed with lung cancer or asbestosis may qualify for compensation from multiple trusts as well. An experienced attorney can identify which trusts cover your specific diagnosis.
Asbestos Trust Fund Payment Percentages
How much money someone receives depends on the payment percentage of each asbestos trust fund. For example, a trust with a 5% payment percentage pays $30,000 on a $600,000 scheduled mesothelioma claim. A trust with a 100% payment percentage pays the full scheduled value. Because payment percentages vary so widely, from less than 5% to 100%, filing with multiple trusts simultaneously helps people obtain the compensation they need for treatment and support.
Asbestos trust funds pay in a single lump sum, not installments. Once administrators approve a claim through either expedited or individual review, the trust issues the one-time payment. If you file with multiple trusts, each trust issues its own separate lump-sum payment on its own timeline, so you may receive several payments at different times.
Average Asbestos Trust Fund Payouts in 2026
Asbestos trust fund payouts for mesothelioma claims range from $7,000 to $1.2 million per trust, with a median scheduled value of $180,000, according to the RAND Institute for Civil Justice. RAND’s analysis also indicates an individual trust fund claim pays around $41,000 on average. People who file with multiple trusts typically receive $300,000 to $400,000 in total compensation, with some cases exceeding $1 million. Many mesothelioma patients pursue both trust claims and lawsuit settlements when applicable.
Several factors affect how much compensation a claimant receives. Disease type carries the most weight, as mesothelioma claims receive the highest scheduled values across trust funds. Trustees also weigh exposure duration and the quality of documentation supporting the claim.
Trust funds offer two review tracks. Expedited review processes claims faster and pays the standard scheduled value. Individual review can be more beneficial because claimants can challenge the payout amount the trust initially offers. Those with mesothelioma may receive more than the predetermined amount assigned to their disease level. Only about 2% to 3% of claims go through individual review. The majority of claimants use expedited review to receive payment faster.
Filing Deadlines and Limitations
Each asbestos trust fund sets its own filing deadlines and eligibility requirements. While trusts often mirror state statutes of limitations for mesothelioma lawsuits, they operate independently. Trust fund deadlines often range from one to three years from the date of diagnosis or a loved one’s death.
Asbestos trust funds sometimes grant exceptions to filing deadlines, evaluating claims on a case-by-case basis. Common grounds for exceptions include delayed or incorrect diagnoses, newly discovered medical evidence, proven manufacturer fraudulent concealment or incapacitation of the claimant at the time the deadline passed.
Some trusts also offer “tolling,” which can temporarily pause the deadline clock under qualifying conditions. Anyone who believes they’ve missed a deadline should consult our experienced asbestos attorneys, who can assess eligibility for an extension.
Gathering Evidence for an Asbestos Trust Fund Claim
Your attorney will help you compile the documentation each trust requires. The stronger your documentation, the more likely you are to receive a payout.
Commonly Required Documentation
- Biopsy or pathology report confirming your diagnosis
- Death certificate (for wrongful death claims)
- Employment records showing where and when you worked with or around asbestos-containing products
- Military service records (for veterans)
- Product identification records identifying specific asbestos-containing products you encountered
- Witness statements from coworkers or others who can verify your exposure
Building a strong asbestos trust fund claim requires thorough documentation of both your diagnosis and your exposure history. Your attorney will help gather key materials, all of which work together to verify your illness and establish a clear link to specific asbestos-containing products.
Frequently Asked Questions About Asbestos Trust Funds
How much money is left in asbestos trust funds?
Asbestos companies established these trust funds with approximately $37 billion in total assets, according to the U.S. Government Accountability Office. After more than $17.5 billion in distributions, $30+ billion remains available for new claims today. Funds continue to accept claims, and an experienced attorney can identify which trusts apply to your exposure history.
Are asbestos trust fund payouts taxable?
Asbestos trust fund payouts aren’t subject to federal income tax because they compensate for physical personal injury or illness. However, punitive damages, if any, may be taxable, and state tax rules vary. Consult a tax professional for guidance.
How much money is left in asbestos trust funds?
Asbestos trusts reportedly hold more than $30 billion for current and future claimants. Companies originally funded them with roughly $37 billion, and trustees have distributed more than $17.5 billion since 1988. Even after distributions, the balance available today is larger than the original amount because trusts earn investment returns on their assets, and new trusts continue to form through more recent bankruptcies. An experienced attorney can identify which trusts apply to your exposure history.
Are asbestos trust fund payouts taxable?
Asbestos trust fund payouts are not subject to federal income tax because they compensate for physical personal injury or illness. However, punitive damages, if applicable in your situation, may be taxable, and state tax rules vary. Consult a tax professional for guidance.
How long does an asbestos trust fund claim take to pay?
Trust fund claims generally resolve in six to 12 months, which is faster than a mesothelioma lawsuit. Expedited review is the quicker of the two tracks and moves fastest when the documentation is complete at submission. Individual review takes longer because the trust evaluates the claim’s specific circumstances. Filing with several trusts means several separate timelines, so payments usually arrive at different times.
Which asbestos trust funds pay the most?
The trusts that pay the most combine a high scheduled value with a high payment percentage, two elements that do not always go together. For example, a trust with a $600,000 scheduled value paying 5% returns less than a trust with a $200,000 scheduled value paying 35%.
Can I file claims with more than one asbestos trust fund?
Yes, and most people should. Claimants commonly qualify for three or more trusts because a typical work history involves products from several manufacturers. Each trust reviews and pays its claim independently. Filing with every trust you qualify for is what produces the $300,000 to $400,000 total that multi-trust claimants typically receive.
What does it cost to file an asbestos trust fund claim?
Our firm handles asbestos trust fund claims on a contingency basis, so there is no upfront cost to file and no fee unless you receive compensation. Trusts themselves do not charge claimants a filing fee.
How Our Attorneys Help You File Trust Fund Claims
Because trust fund claims often involve exposure in multiple states over a decades-long career, having attorneys licensed in multiple states matters. Dan Wasserberg holds licenses in Texas, New York, New Jersey and Illinois, and our team knows the filing requirements in every state where your exposure occurred.
About The Author
Daniel Wasserberg
Founding Partner
Daniel Wasserberg, a founding partner of Meirowitz & Wasserberg, is a Best Lawyers-recognized and Super Lawyers-rated mesothelioma attorney with over 20 years of experience. Named a Top 100 Trial Lawyer and Top 10 Asbestos-Mesothelioma Lawyer, he leads the firm's national asbestos practice.
