Fees and Costs on Trust Claims

Under a contingency agreement, the attorney's fee is a percentage of the recovery and is only owed if money is recovered. Many agreements apply the same percentage to trust payments and lawsuit settlements, while others treat them differently. The agreement should state this clearly in writing. Some states have rules that affect fee percentages or require specific disclosures to clients. Before signing, read how the fee is calculated, whether it changes if a case goes to trial, and whether it applies to every type of recovery, including trust payments that may require less work.

Beyond the fee, cases involve costs such as obtaining medical records, court filing fees, expert reports, deposition transcripts and travel. Law firms often advance these costs and are repaid from the recovery. Trust claims usually involve fewer costs than lawsuits, but some expenses still apply. Your agreement should explain which costs you are responsible for, whether they are taken before or after the fee is calculated, and how they will be reported. That order of calculation can make a real difference in your net recovery.

Each time money is distributed, you should receive a written statement showing the gross amount, the fee, each cost and the net amount paid to you. Take time to review it rather than signing quickly. Compare the fee to the percentage in your agreement and ask about any cost you do not recognize. It is reasonable to ask for receipts or more detail about larger expenses. Keep every statement together, since these records are useful for tax preparation, estate administration and tracking your total recovery across many trusts and defendants over several years.

1. 1

   Read the fee agreement closely and confirm how it applies to trust recoveries.

2. 2

   Ask whether costs are subtracted before or after the fee is calculated.

3. 3

   Request an itemized statement with every payment and compare it to your agreement.

4. 4

   Ask about any cost you do not understand before accepting a distribution.