Legal Settlement Question?
I retained an attorney (via contingency) for an accident involving a cited third party. The insurance of the third party has finally settled. My question is about procedures for the disbursement of the settlement. My attorney says that I must sign the check from the third-party insurance, return it to him, he will put it in a "trust", and once the trust "clears", he will write a check to me for my settlement amount (minus his contingency fees), and another to my insurance (due to a subrogation agreement where a third party is involved). I don't have 100% trust in my attorney, so my question is, is this in fact the standard procedure in these matters?
Only valid responses will be acknowledged, and thanks in advance for those.
Answers:
Generally speaking, that is how it occurs.
You have to sign the settlement draft; the attorney places the funds in a State Bar Association monitored client fund/trust account; the attorney places his fees in his own personal account; and the attorney then settles all of the liens on the claim out of the account.
Once all of the liens have been settled, you shall receive what is left.
However, if you received a sizable settlement amount, the attorney can advance you a lump sum payment of your award if there is enough left to settle the outstanding billings/liens.
I would request a copy of the settlement draft, as well as a full accounting as to where the moneys are disbursed.
Good luck.
Yes, it is standard procedure. If you don't trust him, you can sign the check and put it in a trust yourself, but if he's willing to do it for you then I don't see the point in wanting to do it yourself. Just ask him what trust account he is putting it in, and make sure it is actually an independent account not under his control.
Yes. That is standard procedure. He has a special trust account that is closely monitored by the state Bar. He has to make sure the insurance company's check clears before he can write you a check. Trust me sometimes, they don't always clear. If he were to write you a check and it bounced because the other one hadn't cleared yet, the state bar would be on him like rice on water! Don't worry though. It will be fine, it just takes a couple days and then the bank will notify him it cleared and then you can get your payment.
FYI - Lawyer trust accounts do not gain interest. I mean they sort of do, but all interest is paid straight from their account by the bank to the state bar. This is to prevent attorneys from holding large sums of money to make a profit.
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