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What You Should Know

Settlements for Minors in Personal Injury Cases

I recently wrote how a personal injury case involving a minor is different than a case involving an adult. Not only is the case treated differently, but the way a settlement for a minor is dispersed is different as well.

In addition to not having complete control over deciding whether or not to settle a minor’s case, parents or legal guardians also do not have complete control over managing a minor’s net settlement funds. As I explain to my clients, the key fact to keep in mind is that the parents or legal guardians are pursuing the case for the minor’s benefit, not their own personal benefit. This means that the settlement funds legally belong to the minor, not to the parents or legal guardians. Parents or legal guardians are required to protect the money while the minor is growing up, and they are also required to give all of the money to the minor once he or she turns eighteen years old.

Parents or legal guardians are certainly not allowed to spend the money on themselves. And, they are not allowed to spend the money on necessities that they are legally obligated to provide to the minor because of the parent/guardian-child relationship, such as food, clothing, and shelter. Significantly, these restrictions apply regardless of how small the minor’s net settlement funds may be.

However, if the minor’s net settlement funds equal more than $15,000, then the judge will impose additional restrictions to ensure that the funds are managed properly. For example, the judge may require the parents or legal guardians to submit bank account statements and receipts on an annual basis so the judge can see exactly what is purchased and how much was spent. Or, alternatively, the judge may require that the funds be placed into a restricted bank account which means that the parents or legal guardians would have to obtain pre-approval from the judge every time they want to withdraw money. In other words, the bank would literally not permit the parents or legal guardians to withdraw even a penny of the money unless the judge has pre-approved the withdrawal.

If the parents or legal guardians violate these rules and spend the minor’s money inappropriately, then the judge can issue sanctions against them, and the minor can also actually sue them once he or she turns eighteen years old. Over the years, I’ve encountered several parents who became annoyed by these rules, which they perceived as needless “red tape.” In those situations, I simply explain that laws are sometimes necessary to protect groups of people who cannot protect themselves, such as children. Unfortunately, there are some parents out there who, if given the opportunity, would take their child’s money without hesitation. As a result, the Florida legislature determined it was necessary to pass laws aimed at thwarting the frivolous or improper expenditure of a child’s net settlement funds.

Just as the Court pays special attention to cases involving a minor, they also pay special attention to settlements for minors. Above all else, the Court wants to ensure minors’ rights are appropriately safeguarded. While the rules may sometimes seem difficult to understand, in the end we all want the best for the children involved in any personal injury case. As an attorney, and as a father, I take that responsibility very seriously.