What Is A Structured Settlement For A Minor

Structured settlements reduce the risk that anyone will embezzle misuse or withhold large sums of money belonging to the injured claimant.

What is a structured settlement for a minor.

Structured settlements can be used to finance college educations by providing a certain sum of income each year that the child would attend college. Other payment options for minors exist including trusts and guardianship accounts. 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. Court approval is required for all settlements involving minors no matter how small the sum.

A structured settlement is one of the safest financial tools out there. Another option for protecting a child s injury settlement is the purchase of an annuity. Structured settlements for minors are usually paid through an annuity from a life insurance company just as for adults. Structured settlements only apply to large personal injury cases usually involving policy limits settlements of at least 100 000 00.

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. It is a good idea to check with the court for any particular practices followed by that court in approving minors settlements. Special needs trusts and other options. This is set by state law and is the topic of this article.

Choosing a structured settlement for a minor may also speed up court approval because this arrangement is designed to protect minors interests. 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. Please seek the advice of a qualified professional before making financial decisions.

A structured settlement annuity for minors is typically established by the court to provide for an affected party financially. Structured settlements are considered ideal for ensuring that an underage child s cash settlement is preserved and spent appropriately. 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.

Litigation involving someone under the legal age imposes requirements as to how any settlement is to be achieved and distributed. The funds may commonly be used to pay for medical bills therapy rehabilitation or other similar expenses for the child.