What Is A Structured Settlement For A Minor

Another option for protecting a child s injury settlement is the purchase of an annuity.

What is a structured settlement for a minor.

Special needs trusts and other options. Structured settlements are regulated by insurance companies. It is usually arranged to begin when the minor reaches the age of majority which can differ depending on the state you live in or sooner if the proceeds are paid into a trust account. Structured settlements only apply to large personal injury cases usually involving policy limits settlements of at least 100 000 00.

The surrogate will act as custodian of the child s funds until the child reaches the age of 18 whereupon the young adult will be given their money along with the interest it has earned. The funds may commonly be used to pay for medical bills therapy rehabilitation or other similar expenses for the child. A structured settlement annuity for minors is typically established by the court to provide for an affected party financially. Litigation involving someone under the legal age imposes requirements as to how any settlement is to be achieved and distributed.

Structured settlements are considered ideal for ensuring that an underage child s cash settlement is preserved and spent appropriately. Structured settlements for minors. It is a good idea to check with the court for any particular practices followed by that court in approving minors settlements. Structured settlements started in the late 1970 s and they are a big business.

Other payment options for minors exist including trusts and guardianship accounts. Structured settlements reduce the risk that anyone will embezzle misuse or withhold large sums of money belonging to the injured claimant. Structured settlements can be used to finance college educations by providing a certain sum of income each year that the child would attend college. A structured settlement is one of the safest financial tools out there.

The key difference between an adult owning a structured settlement and a minor owning one is control. Choosing a structured settlement for a minor may also speed up court approval because this arrangement is designed to protect minors interests. A structured settlement allows a personal injury claimant to obtain cash over a period of time rather than obtaining his settlement in a lump sum. Court approval is required for all settlements involving minors no matter how small the sum.

Under the laws of virtually all states now you may not take the funds from a large settlement usually over 5 000 on behalf of your minor child and invest it yourself. Please seek the advice of a qualified professional before making financial decisions.