Detailed Answer — How settlement checks are handled in Utah
When an insurance company issues a settlement check in Utah, several common steps determine how and when you actually receive the money. The exact path depends on who the check is payable to, whether you have hired an attorney, and whether there are outstanding liens or bills that must be paid out of the recovery.
1. Who is the check payable to?
The way a check is made out matters.
- If the insurer issues the check payable only to you (the claimant), you can usually endorse and deposit it into your personal bank account. If you have an attorney, they may ask to receive a copy and keep records of the payment.
- If the check is issued “Payable to [You] and [Your Attorney]” or jointly to you and your lawyer, many Utah lawyers will require you to endorse the check so it can be deposited into the firm’s client trust (IOLTA) account before fees and costs are taken out.
- If the check is made out to you and to one or more lienholders (for example, a medical provider or a healthcare insurer), the check may need endorsements from each payee or may require separate arrangements to clear those liens before you get the net proceeds.
2. Attorney involvement — trust account and ethical duties
If an attorney represents you and the payment is made to the attorney or jointly to you and the attorney, Utah Rules of Professional Conduct require attorneys to safeguard client funds. Under the Utah Rules of Professional Conduct (see Rule 1.15, Safekeeping Property), lawyers must hold client funds in a trust account and promptly notify the client when funds are received. You can read the rules and related guidance at the Utah Courts rules page: https://www.utcourts.gov/resources/rules/.
3. Deductions: attorney fees, costs, and agreed amounts
Before distributing settlement funds to you, the attorney will normally:
- Deduct attorney fees in accordance with your written fee agreement (for example, a contingent-fee percentage).
- Deduct case-related costs the attorney advanced (court filing fees, expert fees, medical records costs, deposition costs, etc.), if your agreement permits.
- Pay any agreed disbursements (e.g., lien payments, bills that must be satisfied).
The attorney must provide an accounting to you showing the gross settlement, all deductions, and the net amount you will receive.
4. Handling liens, subrogation, and third-party claims
Often medical providers, health insurers, workers’ compensation carriers, or government programs have rights to be paid from a settlement. Typical examples include:
- Private medical providers or hospitals that placed treatment liens.
- Health insurers or automobile insurers with subrogation claims.
- Medicare (federal) conditional payment amounts or Medicaid/state health plan claims.
These claims can delay your receipt of funds because the attorney or client must confirm amounts owed, negotiate reductions, or obtain payoff letters. Federal programs like Medicare also require reporting and may assert a right to repayment; federal rules (Medicare Secondary Payer) apply to Medicare conditional payments. (For Utah-specific statutory resources, check the Utah Legislature site: https://le.utah.gov.)
5. Joint checks and bank procedures
If a check is jointly payable to you and an attorney or to multiple payees, many banks will not allow a lawyer to cash the check without first depositing it into the firm’s trust account and then distributing funds. You should expect the attorney to:
- Deposit the check into the client trust account (IOLTA) promptly.
- Pay liens and obligations out of that account as appropriate.
- Prepare a final settlement statement and then issue you a client distribution (usually by check or wire transfer) for the net balance.
6. Timing — how long until you get paid?
Timing varies. Typical steps that add time include:
- Confirming the insurer issued the final settlement check and allowing it to clear (banks may place holds).
- Obtaining payoff amounts and lien releases from medical providers or insurers.
- Settling disputes about fees, costs, or lien amounts.
Depending on complexity, distribution can take days to several weeks from the date the insurer issues the check. If only a client receives a single-party check and there are no liens or attorney involvement, payment can be immediate after endorsement and bank clearance.
7. What you should get in writing
Before final distribution you should receive a written settlement statement (sometimes called a closing statement or HUD-like breakdown) that shows:
- Gross settlement amount.
- Attorney fees and how they were calculated (reference to your fee agreement).
- Itemized costs and expenses deducted.
- Payments to lienholders and remaining net payment to you.
8. Practical tips on receiving the money
- If you want funds wired rather than receiving a paper check, tell your attorney or the payer in advance and confirm banking details securely.
- Keep copies of all documents: the settlement agreement, check image, trust-account accounting, and lien payoff letters.
- Before signing any release, confirm that the settlement check has been issued and that your attorney’s accounting describes when you will receive funds.
Relevant Utah authority and resources
Utah attorneys are governed by the Utah Rules of Professional Conduct (see Rule 1.15 on safekeeping client property) published by the Utah Courts. See: https://www.utcourts.gov/resources/rules/.
For statutory questions about liens, subrogation, or state health-plan claims, consult the Utah Code at the Utah Legislature site: https://le.utah.gov. If a federal program like Medicare may have a repayment claim, review Medicare Secondary Payer rules and seek counsel experienced with federal liens.
Disclaimer: This information is educational only and is not legal advice. It does not create an attorney–client relationship. For advice about your specific case, talk with a licensed Utah attorney who can review your documents and explain how the rules apply to your situation.
Helpful Hints
- Ask your attorney early: who will the check be made payable to and how will distribution work?
- Request a written fee agreement and a sample final settlement statement so you know what to expect.
- If medical bills or liens exist, get written payoff quotes before settlement whenever possible.
- Confirm whether Medicare or Medicaid might assert a claim — federal programs often require notification and may affect net recovery.
- Keep all checks, settlement documents, and final accounting for tax reporting and future questions.
- If you believe funds were withheld improperly, ask for a written explanation and consider getting a second opinion from another Utah lawyer or contacting the Utah State Bar for guidance.