Structured settlements help to secure a brighter future for children who have suffered a serious physical injury or the wrongful death of a parent. Settlements for, or on behalf of, children or minors must be court approved. While the Court of jurisdiction may vary by the type of case, court oversight is necessary regardless of whether your child’s lawsuit involves medical malpractice, personal injury or the wrongful death of a parent or sibling.
We have extensive experience working on all aspects of minors' settlements, with attorneys, parents and guardians, guardians ad litem and all parties to settlements for minors. Many structured settlement annuitants, whether we have written them or not, contact us when they become adults to provide education and an orientation about their structured settlements. This has been helpful in preventing unwarranted sales of structured settlement payments.
What is The Court's Role in Settlements Involving Minors?
The judge’s role, in most jurisdictions, is to assist in the determination of the settlement’s fairness and to assure that funds are safeguarded until your child or minor ward is an adult. If cash is paid in a lump sum, most judges require that the funds be placed in a "protected" or "blocked" account until the age of majority (age varies by state law). The money is taxed yearly on interest in excess of a modest exempt amount. The rate of return on the protected or blocked accounts is usually quite low, typically equivalent to a savings account. With such protected or blocked accounts, your child or minor ward assumes complete control of the money, in a lump sum distribution, at the age of majority.