Protecting a Minor Child’s Personal Injury Settlement

We have heard about personal injury settlements involving adults too many times. But how are disability lawsuits for minors handled? Is the settlement of a minor protected? The general rule is that unless there is court approval of the settlement, a personal injury settlement for a minor is not binding on the minor. If the parents settle an injury lawsuit for their minor child, so the settlement against the minor child is not strictly binding. Therefore, within two years after the eighteenth birthday of that child, the minor child can re-affirm the argument. But you might ask: Why would an insurance provider ever pay a lawsuit for personal injury involving a minor child if the arrangement is not binding? Simply put, in a “pleasant suit,” the insurance provider will condition the settlement upon receiving court approval, choosing from the law firms in the Chicago area.

When a settlement arrangement for the minor child has been reached by the parties, the insurance firm refers the case to their counsel who prepares the legal records for a friendly suit. The judge then appoints an impartial “guardian ad-litem,” often referred to as a “attorney ad-litem,” after the friendly suit is filed. This person is an attorney appointed by the judge to review and examine the settlement to decide if it is in the minor child’s best interest.

The ad litem also discusses the terms of the settlement agreement prior to accepting the settlement. Usually, the ad-litem would request that the settlement proceeds be deposited and kept in the court’s register for the minor child before the child becomes eighteen (18) years of age. The parties may often consent to have the proceeds invested into a private annuity where the funds will obtain a higher interest rate. The funds shall, however, be invested in such a fund for the safety of a minor child. Similarly, parents are not given any access to these assets.

The counsel will decide to the court whether the settlement should or should not be accepted until the ad-litem completes the investigation. The ad litem and the court will usually accept the settlement after a brief hearing unless there is anything out of the ordinary. Typically, the processes in a pleasant suit are very simple and regular.

There may be few cases where the court has allowed the parents, such as a college savings account, to invest the minor ‘s settlement proceeds in an investment of their choosing. Parents will, however, be obliged to follow the orders of the courts to spend those funds properly and not to use the funds for their own use. The object of the friendly suit, after all, is to secure the compensation proceeds of the minor for the benefit of the small child.

When the settlement is accepted by the judge, then the settlement against the minor child becomes binding. Likewise, any allegations resulting from the accident can not be reasserted by the infant. This is how it guarantees the insurance provider that the settlement is final. A pleasant suit costs money, however. And because there is a friendly suit for the good of the insurance provider, the insurance company can cover the expenses associated with the friendly suit, including the ad litem fees. Thus, the insurance firm could not insist on a pleasant suit on smaller settlements. The profits of the child’s settlement are tendered to the parents in these conditions and are not legally covered.