Can a Settlement Check Issued to You Be Sent in Somebody Else’s Name?

Dealing with settlement checks can be a complex process, especially when they are not issued in your name. This article will help clarify the situation and provide guidance on what to do.

Understanding Settlement Checks

When you receive a settlement check from legal proceedings, it is typically made out in your name. However, in some instances, it may be issued in another person's name. This can happen for various reasons, including legal or administrative procedures.

Why Is It Not Common to Issue a Settlement Check to Someone Else?

If a settlement check is issued to you, the people from the settlement company will want it made out to your name explicitly. Here are several reasons why:

Proof of Payment: A check made out to the individual receiving the settlement is the accepted method for proof of payment. The company wants a canceled check made out to the recipient so they can confirm the payment has been made. Legal Compliance: Lawyers and legal firms often use escrow accounts to ensure trust and manage the distribution of funds. If the check is issued to an attorney or trust account, it must be deposited and then distributed to the rightful recipient. Audit and Verification: Settlement checks are closely monitored for audits. If a check is issued in your name but you cannot produce it, it could lead to delays or complications in the settlement process.

What If You Receive a Check Made Out to Someone Else?

If you receive a settlement check made out to someone else, you need to contact your attorney immediately. The check may have been issued in a trust account, or it was drawn on an account you don’t recognize. Here’s what you should do:

Consult Your Attorney: An attorney can provide the necessary guidance to navigate this situation. They will help ensure that the check is properly handled and that your rights are protected. Deposit the Check: To protect your interests, you should deposit the check as soon as possible. Then, follow up with your attorney to address the discrepancy. Negotiate Reissuance: If the check was issued in an incorrect name, you should request a new check be issued in your name from the settlement company.

Conclusion

Settlement checks are typically issued in your name to provide transparency and ensure that the payment is received by the rightful party. If you encounter any issues with the check being sent to someone else, it is crucial to communicate with your attorney to resolve the matter promptly.