Settlement Allocator Guide for Kentucky

What this calculator does

DocketMath’s Settlement Allocator helps you split a settlement amount across multiple categories of damages (for example: medical expenses, lost wages, and other components) using a clean, consistent method. The goal is to produce an allocation schedule you can use for internal analysis, documentation, or downstream tasks that depend on knowing which portion of a settlement corresponds to which category.

In Kentucky, the allocation work often intersects with timing rules—especially when you’re checking whether a claim or sub-claim is still within the statute of limitations (SOL). While the settlement allocator does not “decide” liability, it can help you structure the settlement numbers so they align with the categories you’re actually pursuing or resolving.

This guide focuses on Kentucky timing touchpoints using the following SOL framework:

• 5-year SOL: KRS 500.020 (with specific exceptions referenced below)
• KRS 500.050: 5 years and 1 year SOL depending on the claim type
• UCC (sales/transactions): Ky. Rev. Stat. § 355.2-725 (commonly 5 years in many contexts)

Why allocation matters (practically)

Settlement allocators are often used to:

• Preserve an audit trail of how you arrived at category amounts
• Support documentation packages that track:

  • What the settlement is intended to resolve
  • Which components were disputed or supported
  • How much is attributable to different damage categories
• Model different negotiation positions (for example, “higher medical / lower wage” allocation)

When to use it

Use DocketMath’s Settlement Allocator in Kentucky when you have a lump-sum settlement and you need to translate that sum into category-specific amounts for analysis and documentation.

Consider using it when any of the following are true:

• You’re resolving claims involving multiple damage types (medical, wage loss, property, emotional distress, etc.)
• Your settlement includes components that may have different timing rules (e.g., some claims governed by Kentucky’s KRS 500.020 / KRS 500.050 framework, while certain commercial claims may involve Ky. Rev. Stat. § 355.2-725)
• You’re preparing an allocation that must be internally consistent with the scope of what was asserted
• You want to test how changing assumptions (dates of accrual, category proportions) affects the allocation output

Kentucky timing checkpoints to keep in view

Even though the allocator is about dollars and categories, timing rules often determine whether a category has a plausible “still timely” narrative in the settlement documentation.

Kentucky’s SOL framework you’ll see referenced in practice includes:

• KRS 500.020 — 5 years

  • Exception P3
• KRS § 500.050 — 5 years

  • Exception P2
• KRS § 500.050 — 1 year

  • Exception P4
• KRS 500.050(2) — 1 year

  • Exception V3
• Ky. Rev. Stat. § 355.2-725 — 5 years

  • Exception D3

Step-by-step example

Below is a practical walkthrough using the DocketMath Settlement Allocator tool logic. (Use the tool here: /tools/settlement-allocator. The calculator is designed for allocation math; you supply the inputs that reflect your case facts and settlement structure.)

Example scenario (Kentucky)

Assume you’re negotiating a settlement in Kentucky for $120,000 total. You have three damage categories:

1. Medical expenses
2. Lost wages / income
3. Other damages (for example, replacement costs, loss not otherwise captured)

You also have reasonable documentation that supports the relative magnitude of each category.

Step 1: Gather the settlement and category totals

• Total settlement amount: $120,000
• Medical: $45,000
• Lost wages: $60,000
• Other damages: $15,000

At this stage, the category sums already add up:

• $45,000 + $60,000 + $15,000 = $120,000

Step 2: Use category weights or raw category amounts

In many allocations, you’ll either:

• Enter raw category amounts (the “medical is 45k” approach), or
• Enter weights/percentages and let the tool compute dollar figures

If you use raw amounts, the allocation is straightforward.

Step 3: Review how Kentucky timing may affect what you include

Even if the allocator simply splits the sum, you should sanity-check that your included categories are consistent with the SOL posture.

A common workflow is:

• Confirm your claimed accrual dates (or earliest date the damages became ascertainable)
• Determine which SOL regime likely applies to each category of asserted claim

For Kentucky, you’ll typically anchor your analysis around:

• KRS 500.020 — 5-year SOL (with exception P3)
• KRS § 500.050

  • 5-year option (exception P2)
  • 1-year option (exception P4)
  • 1-year under KRS § 500.050(2) (exception V3)
• Ky. Rev. Stat. § 355.2-725 — 5-year timeframe for certain commercial sales-related claims (exception D3)

Step 4: Produce the allocation table

With raw amounts, the output is:

Step 5: Document the “why” behind your allocation

To make the allocation durable, you’ll want a short internal note identifying the basis for each category figure:

• Medical supported by bills/invoices and payment history
• Lost wages supported by payroll records and reduced earning calculations
• Other damages supported by specific replacement or out-of-pocket evidence

This kind of narrative is often what keeps an allocation from looking arbitrary when reviewed later.

Common scenarios

Settlement allocation gets tricky when the settlement amount is driven by negotiation strategy rather than strictly by documented category sums. Here are common Kentucky-relevant scenarios and how the allocator approach changes.

Scenario 1: Negotiated global settlement exceeds documented totals

Example: Documented category totals might be $90,000, but the deal is $120,000.

How to handle with allocation:

• Decide whether the extra $30,000 is intended to cover:

  • Unquantified risk (uncertain causation)
  • Disputed elements of damage
  • Costs expected to be incurred during litigation
• Assign the premium systematically (e.g., split it proportionally or designate it as a “contested damages” bucket)

Checkbox checklist:

Scenario 2: Categories span different likely SOL frameworks

Because Kentucky SOL timing varies—KRS 500.020 (5 years) versus KRS 500.050 (5 or 1 year depending on the claim type), plus Ky. Rev. Stat. § 355.2-725 (5 years)—you may have categories that plausibly fall under different timing rules.

Practical allocation approach:

• Allocate only what the settlement is intended to resolve (category scope)
• Track accrual dates separately in your internal file
• Use the category breakdown to align which parts were included in the timely portion of the claim

Scenario 3: Partial settlement or structured settlement

You might receive:

• A lump sum now, plus
• Payments over time

With DocketMath:

• Allocate each payment date’s amount to the same categories (or categories that change by agreement)
• Keep a consistent mapping so the allocation doesn’t “drift” across installments

Suggested documentation practice:

Scenario 4: Multiple defendants or insurers

If the settlement covers claims against more than one party, you may need:

• A “total settlement allocation” first
• Then a “payer allocation” (how each defendant’s portion maps to the category totals)

Tip:

Tips for accuracy

You’ll get the cleanest output when your inputs are structured and consistent. These tips focus on practical accuracy—especially relevant when Kentucky SOL considerations appear in your settlement file.

1) Use a category list you can defend

A defensible allocation typically uses categories that match the damages theories asserted in the claim. Common examples:

• Medical expenses
• Lost wages / reduced earning capacity
• Property damage / replacement

Related reading

• Settlement Allocator Guide for Alabama
• Settlement Allocator Guide for Arizona
• Settlement Allocator Guide for California