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Under California law, children under the age of 18 (referred to as “minors”), are required to have their personal injury monetary settlements approved by the appropriate Court. A guardian ad litem (a person to investigate what solutions would be in the “best interests of a child”), is appointed by the Court to proceed with the action on behalf of the minor, unless the child has been emancipated. Thereafter, a minor’s compromise hearing is scheduled with the Court to approve the settlement tendered by the at-fault party.

The purpose of obtaining the Court’s supervision and approval is to ensure that the child receives a fair and equitable settlement.  After Court’s approval, the funds are typically deposited into a blocked account (at a bank or financial institution selected by the guardian), or used to purchase an annuity (investment of funds for future use by the child).   Whether the settlement funds are placed into a blocked account or used to purchase the annuity, all funds are for the use of and by the minor, once they have reached their 18th birthday.  Blocked funds become immediately available at age 18, whereas a purchased annuity is generally payable over time, such as a college education account payable on an annual basis, or lump sum payments at different times and ages after the minor reaches the age of 18 years.  Generally, payments can be a available on any dates and ages selected by the guardian ad litem for the now adult, such as at ages 18, 21, 25 and so on, but subject to Court approval.

On rare occasions, such as nominal settlement of less than $5,000.00, the at-fault party’s insurance carrier may not require a minor’s compromise hearing, and allow the parent or guardian to deposit funds directly into an account for the benefit of the child.  On even rarer occasions (after Court approval), a parent or guardian can petition the Court for early release of a minor’s settlement funds, but the evidence to be provided to the Court must show that the early release of funds is extraordinary and still for the benefit of the child.

If you have questions regarding any type of settlement or injury claim, attorneys at Heiting & Irwin are available for an initial free consultation.

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