Reaching a settlement is the milestone everyone focuses on — but "we settled" and "the money arrived" are separated by a process worth understanding in advance, so nothing about it comes as a surprise.
Step One: The Release
A settlement becomes final when a release is signed — a document ending the claim in exchange for the agreed amount. This is worth reading carefully, because once signed, the claim is over; the settlement can't be reopened later, even if an injury turns out worse than expected. That finality is exactly why claims shouldn't settle before the medical picture is clear.
Step Two: The Check and the Trust Account
After the release, the insurance company issues payment — commonly within a few weeks, though timing varies. The funds go into the law firm's trust account, a separate account where client money is held while the remaining steps are completed. Money in trust is your money being administered, not the firm's.
Step Three: Medical Bills and Liens
Before the net amount is paid, medical providers and insurers with a right to repayment from the settlement — called liens — are resolved. This step can meaningfully affect what you take home, and it's also where experienced handling can help: lien amounts can sometimes be negotiated, and a reduction there goes directly to you. Lien resolution is the step most likely to add time to a payout, especially when multiple providers are involved.
Step Four: Fees, Costs, and Your Net
The attorney fee — the contingency percentage in your written agreement — and documented case costs are deducted. A clear settlement statement should show every line: the gross amount, each deduction, and the net paid to you. It's reasonable to expect that statement and to ask about any line on it.
Lump Sum or Structured?
Most settlements are paid as a single lump sum. In some situations — large settlements, or settlements involving minors — payments can be structured over time. Which makes sense depends on the circumstances, and it's a fair topic to raise before the release is signed.
Is a Settlement Taxable?
Compensation for physical injuries is generally not taxed as income, though certain components can be treated differently. For anything beyond the general rule, a tax professional is the right resource — that's not a corner worth guessing on.
Saguaro Injury Law offers free consultations 24/7, in English or Spanish — no fee unless you recover. Call (602) 217-0000 any hour.