How Settlement Money Is Paid

A lawsuit may involve several companies, and each one may settle at a different time. One might settle early in the case, another shortly before trial. After each agreement, the defendant has its own process for paperwork and payment. Trust claims add more separate payments on their own timelines. As a result, money usually comes in over months or longer. This can be frustrating, but it is normal. Keeping a running list of which companies and trusts have paid helps you understand how much of the case has been resolved.

Settlement money commonly goes first into the attorney's client trust account. From there, the attorney's fee and case expenses are taken out according to your written agreement. Certain liens may also need to be addressed, such as amounts some health plans or government programs paid for related medical care and can seek back. Only then is the remaining amount sent to you or the estate. Each distribution should come with a statement listing the gross amount, each deduction and the net payment. Review it carefully and ask about anything you do not understand.

If the patient has died, money is often paid to the estate or divided among family members under state law or court approval. This can add steps, such as probate filings or a judge approving how a wrongful death recovery is shared. The estate representative usually signs releases and receives funds on behalf of the estate. Families should expect these steps to take time and make sure the representative keeps careful records. Clear communication among relatives helps prevent misunderstandings about when and how money will be distributed.

1. 1

   Ask for an itemized statement with every distribution showing fees, costs, liens and the net amount.

2. 2

   Keep a running record of each company or trust that has paid and the date received.

3. 3

   Ask whether any health plan or government program has a lien that must be resolved.

4. 4

   Confirm who is authorized to sign releases and receive money if the patient has died.