My wife has been awarded a settlement but the attorneys will not disburse the funds

Full question:

Through the San Diego Probate Court , my wife is trying to become the legal conservator for her brother (he is 45 and mentally disabled). In November of 2007, My wife and her disabled brother were plaintiffs in a civil lawsuit that settled. She completed all of the legal forms required and our attorneys received the funds from the defendant's insurance company. It's nearly four months later and my wife has yet to receive her half of the settlement even though she was told at two different times that her release and check were being processed. Their reason for holding the funds is that they want to wait until either a Conservator is appointed by the Court for her brother or until a Judge can approve their attorneys fees (40%). Could you tell me what is the correct process for approval of attorneys fees for her disabled brother's half of the settlement? Is it the judge that can only approve who can get the attorneys fees? Or do they have to wait until a Conservator is appointed to sign off? The case involving my wife and her brother began two and a half years ago with her acting as Guardian Ad Litem and as I stated, it has already settled. My other question was this: regardless of the circumstances with her brother, do they have any right to hold my wife's half of the settlement. She has agreed to pay the attorneys fees (40%) and does not want anything to do with her brother's money. It's very frustrating because our attorneys are not familiar with this type of law and are being overprotective by holding the entire funds. I know you cannot give advice, but I want to know what the procedure and/or law there are. I don't believe they have the right to hold our half of the settlement. I certainly understand if they need to hold her brother's half because of his disability and his rights with the state.

• Category: Civil Actions
• Subcategory: Settlements
• Date: 04/07/2025
• State: National

Answer:

Typically, when a settlement is reached before trial, the court must approve the settlement and associated fees before the funds may be disbursed. California statutes don’t specify a time within which a judge must rule on a motion. However, case law has generally found that judges must act within a “reasonable time”. What is reasonable is a subjective determination, based on all the facts and circumstances in each case.

The following statute applies to the settlement of actions involving a disabled person. There is no time specified for holding a hearing, and the procedures vary whether or not a conservator has been appointed. For good cause shown, an interested party may petition the court and the judge may order that all or part of the remaining balance of money not become a part of the guardianship or conservatorship estate and instead be deposited in an insured account in a financial institution in this state, or in a single-premium deferred annuity, subject to withdrawal only upon authorization of the court.

3600. This chapter applies whenever both of the following

conditions exist:

(a) A court

(1) approves a compromise of, or the execution of a

covenant not to sue on or a covenant not to enforce judgment on, a

minor's disputed claim,
(2) approves a compromise of a pending action

or proceeding to which a minor or person with a disability is a

party, or
(3) gives judgment for a minor or person with a disability.

(b) The compromise, covenant, or judgment provides for the payment

or delivery of money or other property for the benefit of the minor

or person with a disability.

3601.

(a) The court making the order or giving the judgment

referred to in Section 3600, as a part thereof, shall make a further

order authorizing and directing that reasonable expenses, medical or

otherwise and including reimbursement to a parent, guardian, or

conservator, costs, and attorney's fees, as the court shall approve

and allow therein, shall be paid from the money or other property to

be paid or delivered for the benefit of the minor or person with a

disability.

(b) The order required by subdivision (a) may be directed to the

following:

(1) A parent of the minor, the guardian ad litem, or the guardian

of the estate of the minor or the conservator of the estate of the

person with a disability.

(2) The payer of any money to be paid pursuant to the compromise,

covenant, or judgment for the benefit of the minor or person with a

disability.

3602.

(a) If there is no guardianship of the estate of the minor or

conservatorship of the estate of the person with a disability, the

remaining balance of the money and other property, after payment of

all expenses, costs, and fees as approved and allowed by the court

under Section 3601, shall be paid, delivered, deposited, or invested

as provided in Article 2 (commencing with Section 3610).

(b) Except as provided in subdivisions (c) and (d), if there is a

guardianship of the estate of the minor or conservatorship of the

estate of the person with a disability, the remaining balance of the

money and other property, after payment of all expenses, costs, and

fees as approved and allowed by the court under Section 3601, shall

be paid or delivered to the guardian or conservator of the estate.

Upon application of the guardian or conservator, the court making the

order or giving the judgment referred to in Section 3600 or the

court in which the guardianship or conservatorship proceeding is

pending may, with or without notice, make an order that all or part

of the money paid or to be paid to the guardian or conservator under

this subdivision be deposited or invested as provided in Section

2456.

(c) Upon ex parte petition of the guardian or conservator or upon

petition of any person interested in the guardianship or

conservatorship estate, the court making the order or giving the

judgment referred to in Section 3600 may for good cause shown order

one or more of the following:

(1) That all or part of the remaining balance of money not become

a part of the guardianship or conservatorship estate and instead be

deposited in an insured account in a financial institution in this

state, or in a single-premium deferred annuity, subject to withdrawal

only upon authorization of the court.

(2) If there is a guardianship of the estate of the minor, that

all or part of the remaining balance of money and other property not

become a part of the guardianship estate and instead be transferred

to a custodian for the benefit of the minor under the California

Uniform Transfers to Minors Act, Part 9 (commencing with Section

3900).

(3) That all or part of the remaining balance of money and other

property not become a part of the guardianship estate and, instead,

be transferred to the trustee of a trust which is either created by,

or approved of, in the order or judgment described in Section 3600.

This trust shall be revocable by the minor upon attaining 18 years of

age, and shall contain other terms and conditions, including, but

not limited to, terms and conditions concerning trustee's accounts

and trustee's bond, as the court determines to be necessary to

protect the minor's interests.

(d) Upon petition of the guardian, conservator, or any person

interested in the guardianship or conservatorship estate, the court

making the order or giving the judgment referred to in Section 3600

may order that all or part of the remaining balance of money not

become a part of the guardianship or conservatorship estate and

instead be paid to a special needs trust established under Section

3604 for the benefit of the minor or person with a disability.

(e) If the petition is by a person other than the guardian or

conservator, notice of hearing on a petition under subdivision (c)

shall be given for the period and in the manner provided in Chapter 3

(commencing with Section 1460) of Part 1.

(f) Notice of the time and place of hearing on a petition under

subdivision (d), and a copy of the petition, shall be mailed to the

State Director of Health Services, the Director of Mental Health, and

the Director of Developmental Services at the office of each

director in Sacramento at least 15 days before the hearing.

The following is a California Rule of Court:

Rule 3.1384. Petition for approval of the compromise of a claim of a minor or a person with a disability; order for deposit of funds; and petition for withdrawal

(a) Petition for approval of the compromise of a claim

A petition for court approval of a compromise or covenant not to sue under Code of Civil Procedure section 372 must comply with rules 7.950, 7.951, and 7.952.

(b) Order for the deposit of funds and petition for withdrawal

An order for the deposit of funds of a minor or a person with a disability, and a petition for the withdrawal of such funds, must comply with rules 7.953 and 7.954.

(Subd (b) amended effective January 1, 2007.)