Detailed Answer

Short answer: After an insurer issues a settlement check in Maryland, how you actually receive the money depends on who the insurer names on the check, any medical or lien claims, and whether your attorney handles the closing. Typically the check is either payable only to you or payable jointly to you and your lawyer. If it is joint-payee, the law firm must deposit it into a client trust account, resolve liens and expenses, and then send you the net proceeds. Expect documented accounting and a short processing period before you get your personal check or electronic disbursement.

Step-by-step: what usually happens

1. Insurer issues the check. The check may be made payable to you alone, to you and your attorney, or to the attorney alone. Insurers sometimes make checks payable jointly when a claimant has hired counsel.
2. Who must sign or endorse the check? If the check names both you and your lawyer, both typically must endorse it. If the check names only you, you can endorse and deposit it yourself. If it names only your attorney, the attorney will deposit it.
3. Deposit into a client trust account (if attorney involved). Maryland attorneys must keep client funds separate from firm funds and typically deposit joint-payee checks into a client trust (escrow/IOLTA) account until the closing is complete. The attorney must follow Maryland’s rules of professional conduct and bookkeeping for client funds.
4. Pay liens, medical bills, and other obligations. Before your lawyer gives you net funds, the lawyer likely will pay or negotiate outstanding medical bills, subrogation claims, Medicare/Medicaid obligations (if they apply), hospital liens, or other liens. These may be statutory or contractual. The lawyer should obtain payoff statements and provide you with an itemized breakdown.
5. Deduct attorney’s fee and case expenses. If you have a contingency-fee agreement, the lawyer will deduct the agreed fee and any case-related expenses (filing fees, expert fees, copying, etc.) from the gross settlement.
6. Final accounting and disbursement to you. After clearing liens and fees, the lawyer issues a final accounting and disburses the net settlement to you by check or electronic transfer. Maryland attorneys commonly send a written settlement statement that shows all deductions and payments.

Timing — when will you actually get the money?

Timing varies. If you receive the check directly and deposit it, you get funds as soon as the bank clears them. If the lawyer handles the check, expect a processing period that usually ranges from a few days to a few weeks. Processing takes longer when third-party liens require negotiation or when multiple payees must be paid. Ask your attorney for an estimated timeline and for updates if the process takes longer than promised.

Special situations to know about

• Joint-payee checks: If the check names both you and your attorney, banks will require both endorsements. Your attorney then deposits it to a trust account and follows Maryland trust accounting rules.
• Checks payable only to you: You can endorse and deposit the check yourself. Be careful: if a lien or subrogation claim exists and you deposit funds without resolving it, you may remain personally responsible for that debt.
• Structured settlements: You can ask for some or all of your settlement as a structured settlement (annuity payments). This requires an agreement and often court or insurer approval, and it changes how and when money reaches you.
• Taxable portions: Some parts of a settlement (punitive damages, lost wages, interest, etc.) can be taxable. Your attorney may recommend consulting a tax advisor and might withhold tax-related amounts only if you ask or if required.

Your rights and documentation

You have the right to a clear, itemized settlement statement showing the gross recovery, attorney fees, expenses, lien payments, and the net amount payable to you. Ask for copies of paid liens and receipts. If you don’t receive an accounting or you believe your attorney or the insurer handled funds improperly, you can seek recourse through Maryland channels (see Helpful Hints below).

Official resources: For questions about insurer handling of claims or to file a consumer complaint, contact the Maryland Insurance Administration: https://insurance.maryland.gov. For questions about lawyer obligations and trust accounts, see the Maryland Courts law library and rules: https://www.mdcourts.gov/lawlib.

Examples of common outcomes (hypothetical)

Example A: The insurer issues a check payable to you and your attorney for $50,000. Your attorney deposits it to a client trust account, pays $15,000 in medical liens, deducts a $16,500 contingency fee (33%) and $1,000 in costs, and then sends you a net check for $17,500 with an itemized statement.

Example B: The insurer issues a check payable only to you for $10,000. There is a hospital lien for $6,000. If you deposit the check and do not pay the lien, the hospital may try to collect from you. To avoid surprises, have your attorney negotiate or pay the lien before depositing.

Disclaimer: This article explains general Maryland practice and common steps. It is for education only and is not legal advice. For advice about your specific situation, consult a licensed Maryland attorney.

Helpful Hints

• Ask for a written timeline from your attorney for handling the check and disbursing funds.
• Request a detailed, written settlement statement that lists the gross amount, fees, expenses, and lien payments.
• Do not sign releases or endorse settlement checks until you understand all deductions and obligations.
• If the insurer makes the check payable to you alone but liens exist, consider letting your attorney handle payoff negotiations to avoid personal liability.
• Keep copies of every check, bank deposit slip, settlement statement, and lien payoff receipt.
• If you suspect mishandling of client funds by an attorney, contact the Maryland Attorney Grievance Commission: https://www.marylandattorneygrievance.org/.
• If the insurer refuses to issue the check properly or delays unreasonably, contact the Maryland Insurance Administration consumer page for guidance or to file a complaint: https://insurance.maryland.gov/Consumer/Pages/complaints.aspx.
• Consult a tax advisor if any part of the settlement might be taxable. The IRS has general guidance at https://www.irs.gov/.