THe amount of the check will be the same as the amount set forth within the release. If you settled with Geico, Allstate or State Farm they will send you a letter stating that they mailed the settlement check ( payable in your name as well as your attorney's ) to his office. So you will know when it went out as well as the amount. He is required by the rules of professional conduct to provide you with a closing statement, a complete breakdown of all costs and expenses his office paid as well as a closing statement. And consider that if he played games with this and gave you less than you were entitled to or lied about the amount of the check he received he could be suspended or disbarred. Few are that reckless and crazy. So have a little faith and some patience.
This is standard practice. The check will be for the amoun in the release you signed. You will get a little less than 2/3 of that amount -- disbursements come off the top. Your lawyer will give you a closing statement that explains where the money went. Your portion is tax free.
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Your lawyer is obligated to provide you with a settlement statement showing all the expenses and fees and the amount you will be receiving from the settlement. You will not have to pay taxes on monies received that is intended to compensate you for injuries and out-of-pocket losses, but if your settlement includes lost wages, you may have to pay taxes. Speak with your lawyer, and don't be afraid to ask questions and demand to see copies of documents.
Usually a settlement check will be made payable to the client and the lawyer. You generally will need to sign this check unless you gave a power of attorney to your lawyer. You will know the amount received when you see the settlement check. Address your tax question to your attorney.
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Mr. Lundeen is licensed to practice law in Florida and Vermont. The response herein is not legal advice and does not create an attorney/client relationship. The response is in the form of legal education and is intended to provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that, if known, could significantly change the reply and make it unsuitable. Mr. Lundeen strongly advises the questioner to confer with an attorney in your state in order to ensure proper advice is received.
This ans. does not create an attorney/client relationship.
In NY the insurance carrier is obligated to send you notice when they issue payment to your attorney.
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Pain and suffering settlement is tax free. Ask to see a copy of the settlement check from the insurance company. Better yet, insist that you go to his office to endorse the check before its deposited into his escrow acct.
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Unless you authorize your attorney in writing to endorse the settlement check on your behalf for deposit in his escrow account, he needs your signature in order to deposit it. Accordingly, you will have an opportunity to see the check at that time. Moreover, if your attorney does not deposit the funds in his escrow account, he runs the risk of being disbarred. Additionally, he is required to provide you with a closing statement showing you exactly how the money was disbursed. In short, although their is no way to prevent a lawyer from doing an illegal and unethical act, it is very rare. Finally, there are no taxes owed on a typical personal injury settlement.
It is very likely that none of your issues will become a problem for you. I am sure that your attorney had you sign a Release from the other party's insurance carrier. If you have a copy or remember what was on the Release, you should know the Settlement amount. There is normally no need to worry about taxes on a personal injury settlement.
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You do not have to pay income taxes on the settlement only on interest or investment income from the money that you collect. To confirm the amount of the settlement ask your attorney to show you a copy of the check from the insurance company.
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