After your case settles, there are two documents that must be signed. The first document is the Release of Claims form. This document releases the paying insurance company (and the at fault driver if this is where claim is made) from any further legal liability in the claim in exchange for your settlement. If you are married, your spouse must sign this document as well, even if they were not involved in the accident. This is a legal requirement that the insurance company must account for.
The second document is a settlement summary. This is a document I create as your attorney in which I itemize EXACTLY where each dollar of your settlement will go. You will sign this document after receiving an explanation (usually over of the phone) about why each provider is being paid what they are. You should have no questions about where any of your settlement funds are going before signing this document. You must print and sign your name where provided and date.
After I receive both documents back, I will send the release of claims form to the insurance company. The length of time it takes for the check to be sent varies by insurance company. Some are very good at getting the check out within 1-2 days after receiving the release of claims, while others can take as long as 21 days. It is generally accepted that they have 30 days to provide the funds after receiving the release. The good news is that it rarely takes that long.
Insurance companies often send the check out with the client’s name and my law firm’s name on it as co-draftees. Some firms make their clients come in to their office just to sign as a co-draftee on the settlement check. This is aggravating as the client will have to come in twice, once to sign and again to pick up their check. It is annoying to call a client in when they won’t get paid until a later date.
At The Gerring Law Firm, we have thought of a solution to this problem that avoids wasting our client’s time. We have taken the precaution of including language in all of our personal injury contracts granting our firm a limited scope power of attorney to sign for clients on settlement drafts. This allows us to deposit settlement checks in our law firm’s IOLTA account without having our client’s drive in just to sign the check before deposit.
All settlement funds are deposited into the law firm’s IOLTA account. This account is monitored by the Missouri bar. Mismanagement of these funds could result in my law license to be suspended, or worse yet, disbarred. For this reason, I have taken every precaution to make sure that my disbursement procedures are above and beyond what is recommended as best practice.
I will immediately notify you once your settlement check is received. There should never be a question if your attorney already has your settlement. Ethics rules provide that we as attorneys must immediately notify our clients upon receiving any settlement funds. Once you are notified that the funds have been received, we will plan to either meet or mail your settlement portion to you. We cannot, however, pay you the day after we deposit the check into the IOLTA Account.
Once I deposit your settlement check, I will not issue payment to clients, myself, or any medical providers until at least 7 days have passed. This is the only way to ensure that the insurance company’s check clears. Banks often place a hold on larger settlement checks; however they sometimes do this with smaller ones too. If the bank that issues the insurance company’s check placed a hold on it after I had already issued payment, this could cause an overdraft. Since the Missouri bar has access to my IOLTA account, they would be notified of this overdraft immediately and an investigation would begin. This would be a headache that could cost me a lot of time. For the safety of all the firm’s clients, the 7 day rule is strictly enforced. No exceptions.
The interest from an attorney's IOLTA account does not go to the attorney. There is absolutely no financial for any reputable attorney to hold on to your funds for long periods of time if they are following Ethics Rules. The interest on all IOLTA funds is automatically withdrawn by the Missouri Bar. The Bar places these funds in a publicly monitored Trust Account. The funds are used to fund non-profit legal groups throughout the State of Missouri.