What Happens To The Money Awarded To A Minor In A Personal Injury Settlement?


If a child who is in your care receives a settlement after being involved in an accident, you may be wondering how to manage that money. You may have some questions about how the money is dispersed and how it can be accessed. Here are some common questions -- and answers -- about personal injury settlements awarded to a minor under age 18.

Is the money given to the parent or guardian?

In most cases, settlement funds in a personal injury case are not accessible by a parent or by the child until he or she turns 18. Instead, the court appoints a "guardian ad litem," a legal representative of the minor who is focused on doing what's best for the child. That person, usually a lawyer, also enters into a contract on behalf of the child to accept the settlement, since minors cannot legally enter into contracts. 

The money is generally placed into a trust fund that the child can access after turning 18. If money is required for related medical bills or equipment -- or sometimes for other reasons like funding a college education -- the guardian ad litem can petition the court to allow money from the trust fund to be accessed before the child is 18.

Are there alternatives to a trust fund?

Sometimes the court will allow parents to set up a structured settlement for the minor. This is usually an annuity that makes monthly or annual payments to the child after he or she turns 18. Some parents prefer to take this route so their child will not spend a lump sum foolishly, but there is no other reason than personal preference to take a structured settlement.

Can insurance companies refuse to give the money after a settlement is reached?

Sometimes, after a settlement has tentatively been agreed on, an insurance company can try to get the parent to legally agree that the child won't sue in the future. When an adult is in an accident and receives a settlement, he or she usually signs an agreement that there will be no further lawsuits related to the case. But because the minor can't sign a contract, there is a possibility that the child could come back and file another suit in the future. So the parent is asked to guarantee that there will be no further lawsuits, or the insurance company will come after the parent for legal costs.

If you as the parent refuses to accept this responsibility, there may be some attempt by the insurance company to withhold money or renegotiate the settlement. A skilled attorney can often prevent this from happening.

Can settlement money be used to cover medical bills?

Yes. If you, as the child's parent or guardian, have spent money on medical bills, that money can be reimbursed to you once the claim is settled. Usually, you'll have to fill out some paperwork and present it to the court to prove that you incurred the expenses on behalf of the child. Your personal injury attorney can assist you with filling out the necessary forms.

If you have other questions about thepersonal injury settlement awarded to a minor child that you are responsible for, and you haven't had an attorney working on the case previously, you may want to consult one for advice.


13 July 2016

Learning How To Heal

After you have endured a traumatic, life-changing car accident, it can be hard to transition back into your everyday routine. As friends and family members chat about upcoming outlet mall sales or holiday plans, you might be secretly worried about how to pay your medical bills or forget about that wreck. Fortunately, dealing with your car accident case proactively by working with an attorney can really help. After I was involved in a car accident a few years back, my attorney stood by my side and helped me to argue for what was rightfully mine. I made this website to teach others what to do if they are involved in an accident.