Ask for an itemized distribution
A proposed payment should be understandable line by line. Separate the gross amount, attorney fee, case costs, reimbursement obligations, unpaid balances, and any other deductions. Mark unresolved amounts clearly. “Net” should not conceal items that still need confirmation.
The State Bar of California’s fee guide emphasizes checking whether a contingency percentage is calculated before or after costs. That is a useful contract question; it does not establish a standard fee for your matter.
Work through an invented example
Suppose the gross settlement is $30,000. For illustration only, assume a 30% fee calculated on the gross, $1,500 in case expenses, and $4,000 in confirmed reimbursements.
| Item | Illustrative amount |
|---|---|
| Gross settlement | $30,000 |
| Fee: 30% of $30,000 | −$9,000 |
| Case expenses | −$1,500 |
| Confirmed reimbursements | −$4,000 |
| Remaining before other obligations or taxes | $15,500 |
If the agreement instead calculates the 30% fee after the $1,500 costs, the fee would be $8,550 and the remaining figure would be $15,950. The $450 difference comes from the calculation order. Neither example recommends a fee or predicts your result.
Keep uncertain obligations visible
CMS describes Medicare’s recovery of certain conditional payments. Other reimbursement claims may need separate review. Do not assume every claimed balance is correct, or that negotiating a settlement automatically resolves all third-party obligations.
Tax treatment is another separate question. The IRS settlement guidance distinguishes types of payments and circumstances. Avoid labeling the entire remainder “tax-free” without a qualified review of the actual facts and allocation.
Reconcile before treating the money as available
Ask for the source of each deduction, whether it is final, and who is responsible for paying it. Check whether the payment covers one person or multiple claimants, and whether any amount is held pending resolution of an issue. Keep the signed agreement and final distribution statement together.
A net worksheet is useful because it exposes assumptions. It should not be used to pressure a quick acceptance before the legal consequences of the release and the outstanding obligations are understood.