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Personal Injury Settlements For Minors: Can The Funds Be Accessed Immediately Or Wait Until 18?

On Behalf of | Jul 14, 2018 | Personal Injury

If you are reading this, chances are you are a minor under the age of 18 or a parent of a minor. You also probably know by now that under California law, if a minor is injured and receives a settlement from the at-fault party, the minor will not be able to access these funds until after he or she reaches the “age of majority.”

It might sound unfair, but it is California law, and we should respect that. Settlements for minors must be supervised and approved by the appropriate court. “That process is called a minor’s compromise and release hearing,” says our personal injury attorney in California from the Licata & Yeremenko, A Professional Law Corporation.

What Is A Minor’s Compromise And Release Hearing?

How does this process work? Well, to get things started after a personal injury case has been settled for a specified amount, the court will appoint a guardian ad litem (the person responsible for investigating what solutions would in the best interests of the child).

Unless the child (a minor under the age of 18) has been legally emancipated, the minor and his or her parents have to get the court’s approval to receive the monetary compensation from a personal injury case. Generally, the entire sum of money is:

  • Deposited into a blocked account (accessible after the minor turns 18, and need to be placed into any FDIC-insured bank, trust company, or savings and loan associate; the bank or financial institution will be selected by the guardian).
  • Used to purchase an annuity (investment of funds for future use by the minor after he or she becomes an adult).

The minor’s compromise hearing, in which the guardian ad litem will be present to act on behalf of the minor, will be scheduled by the court to approve the settlement funds prior to depositing them into a blocked account or purchasing an annuity.

Why Personal Injury Settlements Are Not Immediately Accessible By California Minors?

While some people in California think it is unfair that the court does not allow injured minors to access their settlement funds immediately, the purpose of having these court-supervised settlements is to:

  • Help the minor monitor his or her settlement funds by appointing a guardian and approving the settlement.
  • Help the minor spend the settlement funds rationally.
  • Ensure that the settlement is fair and equitable.
  • Ensure that the minor can access and use all of the settlement funds after his or her 18th birthday.

When the minor becomes an adult, the settlement funds on the minor’s blocked account will be immediately unblocked and available for use. A purchased annuity, on the other hand, is provided to the minor over time and is generally used to pay for education and college on an annual basis or lump sum payments after the minor reach the age of majority.

“Usually, these payments are scheduled and approved by the guardian to become available when the now-adult reaches the age of 18, 21, and 25,” explains our experienced personal injury attorney in California.

Do Settlements For Minors Always Have To Be Approved By The Court?

Not always. There are occasions when no approval by the court is required in order for the minor to access the settlement funds immediately. Our California personal injury lawyer explains that when the settlement is worth less than $5,000, the minor’s compromise and release hearing is usually not necessary.

Also, the guardians and parents may be able to petition the court for early release of the minor’s settlement funds even when he or she has not reached the age of 18. However, in that case, the guardian and/or parents will have to demonstrate evidence that the early release of the settlement funds is justified and is for the best interests of the child.

Are you a minor or a parent of a minor and have more questions about how personal injury settlements for minors are handled by California courts? Schedule a free consultation by contacting Licata & Yeremenko, A Professional Law Corporation. Call at 818-783-5757 or fill out this contact form to get a free consultation.