When parents are divorced, it’s usually the parent who was given the custody of the minor that takes the responsibility of managing the mi...
When parents are divorced, it’s usually the parent who was given the custody of the minor that takes the responsibility of managing the minor’s personal injury payout. In joint-custody situations, the responsibility of administrating the minor’s settlement goes to the parent with primary custody. The court may, however, decide to award the settlement to the non-primary custodial parent.
Divorced parents should understand that the settlement legally belongs to the minor and they are just acting on his or her behalf. The court tries to arrive at a decision that safeguards the child’s best interests.
Court Approval of Settlements
While the custodial parent is legally allowed to file a personal injury claim and accept a proposed settlement on behalf of the minor, he or she doesn’t have the right to settle a minor’s claim. Only a court-ordered ruling can settle claims filed on behalf of minors.
When the court receives a proposed settlement on the minor’s behalf, it will name guardian ad litem (an independent attorney) to serve as a representative of the child and ensure the settlement reflects the best interest of the minor. The guardian ad litem will hold a meeting with the minor and custodial parent(s), check the medical reports and fees, and check any other important documentation to make sure the proposed settlement is fair and in the minor’s best interest.
The minor, the parents, and the guardian ad litem will testify before the judge at a “Pro Ami” hearing. The judge will then ask questions and carefully look at the documents to be sure that the proposed settlement is justifiable and mirrors the child’s best interests. Once the court approves and makes a ruling in favor of the child for the proposed settlement amount, the claim is deemed settled.
Personal Injury Payouts for Minors
In most instances, a personal injury settlement awarded to a minor will be disbursed in two settlements.
1- The first settlement, which most people call lump sum, usually takes care of crucial and immediate financial damages, such as medical bills and legal fees.
2- The second installment covers future medical costs and intangible damages, like pain and emotional distress, that could potentially affect the minor later in life. This installment is usually put in a trust fund for the minor. Parents are barred from accessing this trust fund unless they have the court’s permission. Once the minor attains the age of the majority, he or she can access the money because it will be his or her personal property.
Can Someone Other Than the Custodial Parent File an Injury Claim on the Minor’s Behalf?
When a minor’s custodial parents are unable or reluctant to file an injury claim, and the child doesn’t have a legal guardian, some states permit a person referred to as a “next friend” to pursue the claim. When a “next friend” files an injury claim, the court names guardian ad litem to confirm whether the “next friend” has the child’s best interest at heart. If a child sustains fatal injuries due to negligent actions of another person or entity and the parents are unable or reluctant to file an injury claim, states may allow the child’s representative to bring a wrongful death lawsuit against the responsible parties.
Fiduciary Duty
If a minor wins a personal injury award, parents have a fiduciary duty to safeguard the financial welfare of their child, irrespective of their marital status. The parent may be responsible for managing the initial costs from the injury. They must also save the settlement money for future costs associated with the injury. The courts may permit the parent to access the award money to take care of such costs.
