In oil, gold, medical supply and other commodity deals, brokers and intermediaries are usually paid a commission when the deal closes. Paying those commissions through an attorney paymaster gives everyone a written record and one place where funds are received.
1. The commission agreement
Everything starts with a signed commission agreement, often called an IMFPA (Irrevocable Master Fee Protection Agreement). It lists each beneficiary, the commission rate or amount, and the bank details for payment. The paymaster pays only beneficiaries named in signed documents. See IMFPA commission agreements explained.
2. Identification of every beneficiary
Before any payment, the paymaster verifies who each beneficiary is, collects the right IRS form (W-9 or W-8BEN / W-8BEN-E) and screens each beneficiary against U.S. sanctions lists. A beneficiary who will not identify itself cannot be paid.
3. Funds arrive in the trust account
When the deal closes, the paying party wires the commission funds to the attorney's client trust account. The attorney confirms receipt in writing to the client.
4. Payments are sent
The paymaster deducts the bank charges and fees stated in the agreement and pays each beneficiary by wire, as the signed instructions provide. Each beneficiary receives written confirmation.
Common causes of delay
- A beneficiary's bank details do not match its name or company name.
- Missing tax forms or identification documents.
- The paying bank holds a large wire for its own compliance review.
- Payment instructions that change after the agreement is signed. These require written, signed confirmation and a phone call.
Having every document ready before the deal closes is the most effective way to avoid delay.