In most states, the parent of a child who has been injured and received a settlement as reparation for those injuries cannot generally access his or her child’s settlement funds. The reason for this is to protect the child from parents who might use the money to benefit themselves, instead of the child.
“Blocked” Bank Accounts
A court will usually place a child’s settlement money in a “blocked” bank account until the child turns 18. A court will sometimes allow withdrawals from blocked accounts if the funds are needed for the child’s care and well being, and the court is satisfied that the funds are to be used for the benefit of the minor.
Minor Settlements In Kentucky
If your net settlement to the minor is $25,000 OR LESS:
Kentucky law (KRS 387.278) allows the settlement to be paid directly to the attorney’s escrow account and the funds to be put in a restricted account. Alternatively, the funds can be placed in an annuity, although best practice is to have the funds sent directly to the annuity company so interest or capital growth is not taxable. If the settlement is below $10,000 or the timeframe is less than five years, many annuity companies will not accept the funds because they consider them too small. In that case, a restricted savings account or Uniform Gift to Minors Act account may be the better option, depending on your client’s ability and willingness to manage the latter, more complicated option.
If your net settlement to the minor is MORE THAN $25,000:
This involves setting up an estate for the minor and placing the funds either in a restricted bank account (where no withdrawals can be made without a court order until the minor turns 18) or into a structured settlement. The Lawrence & Associates team recommends using a structured settlement for minors under 16, as the guaranteed interest typically results in a larger total amount for the minor over time. For minors aged 16 or older, a structured settlement may offer less advantage unless they are willing to allow the funds to grow until a later point in life, such as age 25 or 30.
Minor Settlements In Ohio
Under Ohio Revised Code Section 2111.18, a parent or legal guardian files the personal injury claim on behalf of the minor. If a settlement is reached, it must be approved by the court if the amount exceeds $25,000. For settlements under $25,000, court approval may not be required but is often recommended. If the settlement is over $25,000, a formal petition must be filed with the probate court in the county where the minor resides. The court will schedule a hearing to review the settlement terms and ensure they are in the child’s best interest. The judge may appoint a guardian ad litem to review the case and make recommendations. In most cases, the settlement funds are placed in a restricted bank account or structured settlement to prevent misuse. The court typically requires the funds to remain inaccessible until the minor turns 18 unless an exception is granted for necessary expenses like medical treatment.
Contact Our Attorneys To Assist With Your Minor's Settlement
If you or someone you know is dealing with an accident related injury involving a minor child contact the experienced personal injury lawyers of Lawrence & Associates Accident and Injury Lawyers, LLC to help that child get the justice they deserve. Our attorneys have the knowledge and skill to craft a powerful case and work to recover the compensation you deserve.
Call us today at (513) 434-6698 or contact us online for a free consultation.
