What Is A Structured Settlement For A Minor

A structured settlement is one of the safest financial tools out there.

What is a structured settlement for a minor. It is a good idea to check with the court for any particular practices followed by that court in approving minors settlements. Another option for protecting a child s injury settlement is the purchase of an annuity. Please seek the advice of a qualified professional before making financial decisions. Special needs trusts and other options.

A structured settlement annuity for minors is typically established by the court to provide for an affected party financially. Court approval is required for all settlements involving minors no matter how small the sum. The key difference between an adult owning a structured settlement and a minor owning one is control. 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.

Structured settlements started in the late 1970 s and they are a big business. The funds may commonly be used to pay for medical bills therapy rehabilitation or other similar expenses for the child. Settlements involving minors introduction. 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.

Litigation involving someone under the legal age imposes requirements as to how any settlement is to be achieved and distributed. Structured settlements only apply to large personal injury cases usually involving policy limits settlements of at least 100 000 00. 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. Structured settlements for minors are usually paid through an annuity from a life insurance company just as for adults.

Structured settlements reduce the risk that anyone will embezzle misuse or withhold large sums of money belonging to the injured claimant. Structured settlements are regulated by insurance companies. 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. Other payment options for minors exist including trusts and guardianship accounts.

Structured settlements for minors. Choosing a structured settlement for a minor may also speed up court approval because this arrangement is designed to protect minors interests.