Detailed answer: What happens after the insurer issues a check?

When an insurance company cuts a settlement check, the mechanics of how you receive the money depend on several common factors: who is named on the check, whether you are represented by an attorney, whether there are liens or third-party claimants (medical providers, Medicare, Medicaid, or health insurers), and whether the claimant is an adult, a minor, or an incapacitated person.

1. Who is the payee on the check?

Possible scenarios:

• Check payable only to you (the claimant). The insurer will mail or deliver the check to you directly.
• Check payable to you and your lawyer (e.g., “John Doe and Jane Smith, Esq.”). Most banks require endorsement by all payees, so the attorney usually endorses and deposits the check into a client trust (IOLTA) account before distributing funds.
• Check payable to the attorney only. Some insurers send checks to counsel depending on the retainer agreement. The lawyer will hold funds in trust and then distribute after expenses/fees are accounted for.
• Check payable to a minor or to a minor’s guardian/court-ordered recipient. Connecticut often requires court or probate approval before distributing settlement funds to minors or wards, so the funds may need to be deposited under court supervision or into a restricted account.

2. Role of your attorney

If you have an attorney:

• Ethical rules require attorneys to hold client funds in a trust account until the client is entitled to them. That means the attorney will frequently deposit the insurer’s check in the firm’s client trust account (IOLTA), wait for the check to clear, pay liens and expenses, take the agreed fee, then send you the net proceeds with an accounting.
• Your written fee agreement governs how attorney fees are deducted (contingent-fee percentage, hourly billing, costs advanced). Ask your attorney for a final distribution statement showing fees, costs, lien payments, and the net you will receive.

3. Liens, subrogation, and third-party claims

Health care providers, health insurers, Medicare, or Medicaid may assert liens or subrogation claims against your settlement. Connecticut cases and practice routinely require resolving these claims before full distribution. Typical process:

• Identify all potential lienholders early (hospitals, doctors, private insurers, Medicare/Medicaid).
• Your attorney may negotiate reductions or require the lienholder to provide written payoff figures.
• Payoff amounts are deducted from the settlement before the net payment to you.

4. Funds clearance and timing

Even after the insurer issues a check, banks often place a hold until the check clears. Attorneys usually wait for the check to clear before issuing final disbursements, because if the check bounces the attorney could be required to return funds already paid out. Expect a short waiting period (commonly a week or two, sometimes longer for large amounts or out-of-state banks).

5. Special situations

• Minor or incapacitated claimant: Connecticut frequently requires probate or court approval to compromise a claim for a minor or incapacitated person. The court may order that funds be placed in a restricted account, invested, or paid out according to a schedule. For information about probate procedures in Connecticut, see the Connecticut Judicial Branch Probate Courts page: https://www.jud.ct.gov/probate/.
• Structured settlement option: Instead of a lump sum, you may elect a structured settlement (periodic payments purchased through an annuity). The insurer or defendant’s funding company will arrange the annuity and periodic payments to you.
• Joint payees: If the check names multiple individuals, the bank will often require signatures from each payee before releasing funds.

6. Documents you should receive

When payments are made, ask for and keep copies of:

• The executed release and settlement agreement (showing the settlement terms)
• The settlement check stub or copy
• A final distribution statement (itemizing attorney fees, costs, lien payments, and net to you)
• Any court order related to approval of the settlement (if applicable)

7. Connecticut rules and resources

Attorneys in Connecticut must handle client funds under ethical rules requiring safekeeping and proper accounting. For official state resources, see:

• Connecticut Judicial Branch (general information about courts and rules): https://www.jud.ct.gov/
• Connecticut General Assembly (statutes and legislative materials): https://www.cga.ct.gov/
• Connecticut Probate Courts (procedures that may apply to minors or wards): https://www.jud.ct.gov/probate/

Because procedures can vary with case facts—medical liens, age or capacity of the claimant, or special payee requirements—talk to your lawyer about the precise timetable and paperwork you should expect.

Helpful hints

• Confirm payee names: Ask the insurer and your attorney exactly who will be named on the check before it is issued.
• Get a written timeline: Request a simple written timeline from your attorney showing when the check is expected, when it will clear, and when you should expect your net payment.
• Ask for a final accounting: Insist on a clear, itemized distribution statement showing attorney fees, expenses, lien payoffs, and net amount sent to you.
• Protect yourself from bank holds: Ask your attorney whether the deposit will be held pending clearance and how long distribution will take after clearance.
• Deal with liens early: Tell your lawyer about any bills or insurance that might assert a lien so payoff figures can be requested and negotiated before the check arrives.
• For minors/wards, expect court steps: If you or the claimant are a minor or under a guardianship, expect additional paperwork and possible court or probate approval before funds are released.
• Consider tax and benefit impacts: Some parts of a settlement may be taxable and some settlements can affect government benefits—consult a tax advisor or benefits counselor as needed.
• Get the release in writing: Don’t sign a general release before you understand the payment method and the net proceeds you will receive.