Minor Child’s Settlement for Injuries in the State of California | What You Should Know

Under California law, if a child (under the age of eighteen) is injured and receives a monetary settlement from the at-fault party, it must be supervised by the court under what is called a minors’ compromise and release hearing. This means that a guardian (usually called a guardian ad litem) must be appointed by the court unless the child is legally “emancipated”; a judge must approve the settlement for your injured child; and the settlement funds generally must be deposited into a blocked account, in any FDIC-insured bank, trust company, or savings and loan associate, or like financial institution located in the state of California, until the child reaches the “age of majority” (eighteen years old). The settlement funds can also be deposited into an investment vehicle such as an insurance annuity contract (single-premium deferred annuity). Or you can have part of the funds deposited into a bank and part of the funds deposited into an investment vehicle. Please see other articles on this website for more details, or your child’s injury lawyer can explain which way is the better route for the settlement funds to be deposited.

Court-Supervised Settlements for Injured Minors in California

An enforceable settlement of a child’s injury case can only be consummated with California court approval per California Probate Code Sections 2504,90 3500,91 3600,92 and per California Code of Civil Procedure Section 372.93 The entire purpose of having a court-supervised settlement for injured minors in California is to:

1. Approve and appoint a guardian to help the minor child monitor his or her settlement funds
2. Ensure that the minor’s settlement is fair and equitable to him or her, and receive a court order to obtain the settlement funds
3. Ensure that the minor receives all of his or her settlement funds when he or she becomes an adult

The court process is the best way to approve and monitor a bodily injury settlement for a minor in California. I have had parents approach me after their child’s injury was approved by the court, and safely deposited into a bank account, to ask me to petition the judge for an early release of part of the settlement funds that do not directly benefit the minor. It is sometimes easily forgotten by some parents that the entire California court process is set up for the direct benefit of their child since the settlement funds are the child’s funds. Remember, an early release of settlement funds is possible, but will be highly scrutinized by the courts, and must directly benefit the minor child. For more details on early release of settlement funds for a minor child’s injury settlement, please see other articles located on this website.

Minor Child’s Settlement for Injuries (Settlements under $5,000)

If the monetary settlement is below $5,000, the California Probate Code Sections 3611(d)94 and 340195 have routinely allowed custodial parents to manage the settlement funds directly on behalf of their minor children, thereby not mandating the filing for court approval. In fact, all the major insurance carriers in California routinely waive the minors’ compromise and release hearings when the settlement amount to the injured child is below $5,000. The reason for non-requirement of court approval for settlements under $5,000 is because judges have discretion to order the settlement funds for a minor child to either be placed in a blocked account with withdrawals subject to court approval, or they can order it paid directly to the custodial parent(s).