Once we agree on a settlement amount, the insurer has to send us paperwork confirming the settlement. I don’t have it yet. They usually send it through the US mail and it may take a week or so. We will call you immediately when we get it, as we need you to come in and sign some documents.
There are three documets you need to sign for settlement – (1) the release, (2) the Authorization to Disburse, and (3) the check.
The release is a “release of all claims.” This is the legal document (a contract, actually) where you agree to waive or dismiss your claims against the negligent party in exchange for a certain payment from their insurer. You have to sign this document before I can release any money to you.
Most releases have similar language. They all recite details about the personal injury accident, and provide that you release and discharge pretty much everyone under the sun for any claims you may have from that accident. You will also usually agree to indemnify the insurer from any claims made on your behalf regarding the accident. Usually, this is designed to cover any claims from your health insurer, Medicare, or other parties related to paying for your medical care.
I will read the release before you sign it. I won’t let you sign a release I haven’t approved. Very rarely, I will insert language into them to protect you. But most releases are standard and they include all the necessary language.
The check is actually made payable to both you and I jointly. You must sign it over to me, and I will put it in my trust account. By putting my name on the check, they make me liable for paying any liens and balances on your case. I cannot claim I didn’t have control of the money. So I have to put this check in the bank and I technically cannot disburse that money until it has cleared the bank and I know the money is in the account. That can take up to 5 business days!
This means when the check comes, you have to come sign it, and then you also have to wait a few days to get your money. I know this stinks, but the ethics rules require me to run this through my trust account, and it is an ethical violation to disburse money before I actually have it in my account. There is no way to short circuit this process.
The Authorization to Disburse
This is a document my office will prepare. It sets forth how all the money will be disbursed. You will see the total, the fees, the costs recovered, and any liens we pay on your behalf. By signing this document, you authorize me to pay these sums for you out of your recovery.
You will also be swearing that you have told me of all the liens in the case, and if there are any additional liens I don’t know about, they will be your responsibility. Obviously, I only know what you tell me, so I have to include this langauge to protect myself. If there are any liens on your recovery that I don’t know about, you should make me aware of them as soon as possible.
This process is a bit of a pain, only because you have to come in to sign documents and then wait a week to get your money. We will make it as fast and painless as we can. When the insurance company’s check has cleared, we will issue a check to your directly for your portion of the recovery.
As always, call me if you have any questions about this process.