A Minor and Structured Settlements
Minors and Structured Settlements
A structured settlement for a child is to make sure the child’s best interest is taken into account. This is done to perhaps prevent parents or guardians from using the money for their own needs rather than the child. Minors cannot directly access or control funds of a structured settlement until they reach a specific age, this is the biggest difference of a structured settlement setup for an adult versus a minor. The responsibility falls into the judges hands of the case to approve the process of which the child will receive their structured settlement payments.
Structured Settlements for Minors
The responsibility for approving the settlement of a minor falls on the judge in the case. The judge will likely take the following things into consideration when determining the best way to set up the minor’s settlement:
- the current needs of the child
- future loss of earnings
- future needs of the child for their future
- the minors disability, if any
Not only are these settlements designed to support the minor until he or she reaches adulthood, but actually continue supporting them as they age. This includes allocating funds for major expenses such as college tuition, car or mortgage payments, and general cost-of-living funds.
Proper Use of Settlement Payments for a Minor
When a child that is entitled to compensation due to the wrongful death of his or her parents or guardians, the court must decide where payments are sent until the child reaches adulthood. The court’s decision will vary on a case-by-case basis, but ultimately appoints one of the following entities to control funds:
- court-appointed guardian
- court-monitored bank account
- trust fund
Advantages of a Structured Settlement for Minors
When the child receives compensation in the form of a structured settlement, the court does everything in its power to ensure the proper use of funds while maximizing opportunity for the child. Additional benefits of structured settlements for minors include:
- Return rate is fixed so that payments cannot decrease for any external reason.
- Regulated by insurance companies in all 50 states.
- Are not taxed as income, despite earning money on interest.
- The money is protected until the child reaches adulthood.
