Claim Records to Keep

Keep every claim number, filing confirmation and letter from a trust or court. Save each settlement agreement and release, along with the itemized distribution statements from your attorney. Keep your fee agreement, the medical records that support the diagnosis, and the work history documents used in the claim, such as earnings statements and sworn statements. If a health plan or government lien was resolved, keep proof of that too. Together, these papers show what was filed, what was paid and what rights were given up, which can matter for later claims, audits or family questions years from now.

Some recoveries may have tax consequences, while others may not, depending on how the money is characterized and on the tax rules in effect. A tax professional will usually want to see the settlement documents and the distribution statements rather than just a total. Structured payments and interest earned on funds held in accounts can also have tax implications of their own. Keeping records organized by year makes it much easier to hand over exactly what is needed. Do not assume a recovery is tax-free or taxable without checking with a qualified advisor who has seen the actual documents.

If the patient dies, the executor or estate representative may need to continue claims, answer trust questions or distribute money to relatives. Clear records make that job far easier during an already difficult time. Consider keeping a summary sheet that lists the attorney's contact information, each trust and defendant, the claim numbers and where the documents are stored. Scanning papers into a secure digital folder, with a backup, protects them from fire, flooding or loss during a move. Tell a trusted family member where the records are and how to access them if you cannot.

1. 1

   Create one folder, paper or digital, for every claim document and payment statement.

2. 2

   Write a one-page summary listing your attorney, each trust and each defendant.

3. 3

   Scan important papers and store a backup copy in a secure location.

4. 4

   Tell your executor or a trusted relative where the records are kept.