Illinois — How to Make Sure a Wrongful Death Settlement Is Filed Correctly and Split as Agreed

Detailed answer — step-by-step checklist and explanation

Hypothetical facts to illustrate: The personal representative (PR) of the decedent’s estate reached a $500,000 settlement with a tortfeasor. The family agreed that the net proceeds (after attorney fees, costs, and liens) will be split 50% to the surviving spouse and 25% each to two adult children. The family wants the court to enter an order so the money is paid out exactly that way.

1. Confirm who can settle and who must sign.

   Under Illinois law, a wrongful death action is prosecuted by the personal representative of the decedent’s estate. Make sure the PR is formally appointed and that the PR (or the PR’s attorney) signs the settlement agreement and any releases. See the Illinois Wrongful Death Act (740 ILCS 180/) for who may bring and maintain the action: 740 ILCS 180/.

2. Memorialize the settlement in a clear written agreement.

   The signed settlement agreement should state the gross settlement amount, the allocation for attorneys’ fees and costs, who will receive distributions and their precise shares, and whether any amounts will be held back for liens or future claims. Attach releases that list every claimant who will release claims arising from the death.

3. Address liens, subrogation, and claims for medical providers or government benefits before distribution.

   Obtain written payoff statements or lien letters from hospitals, health insurers, Medicare/Medicaid (if involved), and any workers’ compensation carrier or other subrogees. The court will expect liens to be resolved or accounted for before money is distributed. If a lien exists, include the lien amounts and payment plan in the proposed order.

4. Prepare the court filing: petition, settlement, release, and proposed order.

   If the lawsuit is already pending in a Circuit Court, file a joint petition (or motion) asking the court to approve the settlement distribution and to enter an order directing how the clerk or escrow agent will disburse funds. Attach the signed settlement agreement, the proposed distribution worksheet, and the proposed order for the judge to sign. If the action has not been filed, the PR should still preserve documentation and consider filing before final distribution to make sure the court’s supervision is available if needed.

5. If minors or legally incapacitated beneficiaries exist, get court approval for their shares.

   When a beneficiary is a minor or not legally competent, the court commonly requires separate approval to protect that person’s interest. The court can order funds placed into a blocked account, invested, or paid to a guardian with supervision. Put any proposed treatment of minor/incompetent shares in your petition so the judge can approve the safeguarding method.

6. Request a specific distribution order and consider retention for contingencies.

   Ask the court to enter an order that: (a) approves the settlement; (b) authorizes payment of attorneys’ fees & costs; (c) directs payment of identified liens; and (d) directs the clerk or escrow agent to distribute remaining proceeds exactly by percentage or dollar amount as agreed. If potential future claims remain (e.g., unresolved Medicare conditional payments), ask the court to retain jurisdiction or to hold a contingency amount in escrow until liens are resolved.

7. Obtain the judge’s signed order and certified copies; use an escrow account if helpful.

   After the judge signs the order, get certified copies and use them to clear bank holds or pay lienholders. Many parties prefer to have settlement funds deposited in a neutral escrow account (attorney trust account or bank escrow) until all conditions in the court order are satisfied. The escrow agent can disburse funds exactly as the order directs once conditions are met.

8. Document distributions and get releases from recipients.

   When funds are paid out, provide signed receipts/releases from payees showing amounts received and a statement that they have no further claim against the settlement proceeds. Keep a complete distribution ledger as part of the court file or estate records.

9. Close out the case properly.

   File a final status report or a stipulation of dismissal (if the suit was pending) and attach proof of distribution if the court requires it. Keep copies of all orders, releases, lien payoff letters, and receipts in the estate file for future proof.

Taken together, these steps give the court a clear record and give you documentation to enforce the agreed split if disputes arise.

Why the judge’s order matters

A signed court order approving the settlement and directing distributions makes the distribution part of the official court record. That order carries enforcement power: if someone fails to follow it, the party entitled to funds can ask the court to enforce its order. Without a court order or solid written releases, enforcement becomes harder and more expensive.

Common issues and how to prevent them

• Disagreement about attorney fees — include the contingency fee agreement and show the math for fees and costs in the petition so distributions are transparent.
• Unpaid medical liens — obtain lien letters early and provide them to the court so the judge can direct payments.
• Missing signatures or an improperly appointed PR — confirm PR appointment in probate records before settlement is finalized.
• Minor beneficiaries — ask the court for protective treatment (blocked account, guardianship receipts, or court-ordered custodial arrangement).
• Tax or creditor issues — consult with the PR’s counsel about whether estate creditors or taxes may affect the net distribution.

Helpful hints

• Put everything in writing: settlement agreement, release forms, distribution worksheet, and proposed order.
• Get lien letters in writing. If Medicare or Medicaid may have paid for care, request conditional-payment demands so you can reserve the proper amount.
• Use an escrow account for the settlement check until the court signs the distribution order or liens are cleared.
• Ask the court to retain jurisdiction or to enter express language about how residual issues (e.g., undisclosed liens) will be handled.
• Obtain certified copies of the court order before making final distributions so banks and lienholders will accept the court’s direction.
• If possible, have all beneficiaries sign releases that reference the court order; that reduces later disputes.
• If you have doubts, hire experienced wrongful-death or probate counsel to draft the petition and proposed order. Small drafting errors can create large enforcement problems later.