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Child’s Settlement Money


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“Edmond El Dabe is the best Attorney I know. His Law Firm represented me in a complicated personal injury case. He was aggressive, kind, honest, understanding, and very fair with me. His staff kept me informed at all times about what was going on with my case. I would highly recommend him to anyone who needs a good lawyer. Thanks so very much to Edmond El Dabe Law and his staff.”

Phyllis W., Laguna Beach, CA

Can I gain access to my child’s settlement money?

Whether a parent can access a child’s settlement money depends on the type of settlement and whether the funds are held in trust. As a general rule, settlement funds paid for injuries sustained by a minor child are for the exclusive benefit of the child. Because the child is the one who suffered the injuries, they should be the one to see the benefit of the funds. Safeguards should be put in place for any settlement received on behalf of a child to make sure the funds are only used for the child and that there are not improperly depleted.

Parents may be entitled to a portion of settlement funds, if they are expressly included in the settlement. For example, a settlement may designate certain funds as reimbursement for medical expenses incurred. In this instance, those funds could be repaid to the parents are payment for medical expenses they paid. Parents of children who receive settlements should consult with an attorney to make sure they are permitted to use funds for reimbursement purposes. In some cases, parents may have their own claim for compensation as a result of damages they sustain in relation to the child’s case. An experienced personal injury attorney can help make sure these issues are properly addressed.

Settlement money from a personal injury case may be paid in a lump sum, structured payments, or different periodic payments. A settlement agreement will typically set forth the specific rules about distribution of the money and how it is to be used. There may also be options for early withdrawal of funds, subject to certain limitations. In any event, it would be prudent for parents who receive funds on behalf of a child to take precautions to ensure the funds are properly utilized for the child.

In many settlement cases where funds are distributed, the funds are held in trust. A trust means that the funds are protected and only distributed according to certain guidelines. A trustee is appointed to manage the trust and disbursement of funds. The trustee is obligated to manage the trust according to the trust provisions and has fiduciary duties to act for the benefit of the beneficiary of the trust. If a parent is the trustee of settlement funds held in trust for the benefit of a child, then the parent must only distribute funds for the benefit of the child and must follow all provisions of the trust.

If a parent wrongfully access the funds for his or her own benefit, then they may be liable and subject to penalties. Any parent who is involved in a personal injury action for a minor child should consult with an attorney to make sure you understand any settlement offers and how the funds are to be handled.

A personal injury attorney can assist with many aspects of a personal injury claim. An experienced personal injury attorney can negotiate settlement amounts and terms that are fair and properly remedy the situation. Personal injury attorneys will be able to provide advice about the process and allocation of funds. An attorney can represent you through the process and ensure that your interests are protected.

Any parent involved in settlement negotiations for their child, should visit with an attorney and have an attorney review any proposed offers before they are accepted. An attorney will help parents make more informed decisions about their child’s case.

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