Approval Process for Settlements of Minors

Injury claims for Minors (under the age of 18) in North Carolina can present several difficulties. Today we’ll talk about the last hurdle: Getting the settlement approved in court.

When do you have to seek court approval for settlements for minors? Click here to read what I have to say about that.

Why do you need court approval? That’s also in the link above, but here’s a quick summary…Technically, minors can’t enter into a contract, which means they can’t settle their injury claim. Their parents can’t do it either, because it’s (mostly) not their claim! Granted, the medical bill portion of the minor’s claim is in fact the parents’ claim, but it normally gets lumped in with the minor’s recovery unless there are good reasons not to (sometimes there are). So the legislature empowered the courts with the ability to approve settlements for minors when they are, in the judgment of the court, in the best interests of the minor. This allows everyone involved finality so that when junior turns 18 he can’t come back and raise that claim again.

But let’s assume you’ve reached the point where everyone has agreed to settle. What happens then?

The first step is getting a Guardian ad Litem (GAL) appointed. This is where the Clerk appoints an adult with the ability to make litigation-related decisions for the minor. I normally request this at the same time that I file what is referred to here as a “friendly suit.” That gets you a court file, which then allows you and the defendants, represented by an attorney usually hired by an insurance company to jointly petition the court to approve the settlement. This is a Motion to Approve a Minor Settlement.

The rest is fairly straightforward. You get a date on a Motions Calendar and then the attorneys for the plaintiff (the minor) and the defendant, as well as the GAL and the minor, too, generally, unless there’s a good reason not to. At the call of the calendar, the judge determines the order of the Motions. Normally, these cases go first because they are short and because they want to get the kids back to school, or at least out of court.

Judges have different processes and standards for these, so it behooves you to do your research as to which judge you’re in front of and make sure you have all that they’ll require. But generally it’s a matter of presenting the facts and letting the GAL state that they understand and approve of the settlement. The judge may require further information, but this is normally the minimum.

The judge will, in his or her discretion, sign the proposed Order which will always tell what money comes in, what goes out, and to whom. The most important bit here is that the minor can’t just get the money yet. Depending on the amounts and the time-horizon (how long until they reach majority) there are different things that might happen to that money. The basic option is to leave it with the Clerk of Court. They hold it, but most of whatever minimal interest is made is eaten by the Clerk’s fee for holding it. Not ideal, but relatively safe. Another option often chosen is a structured settlement, which is, in a nutshell, giving the money to a financial company who in return promises to give it and more money back at a pre-determined time marker (age 18, or periodic payments thereafter). Some folks opt for a Trust so that the money can be used for the benefit of the minor in their minority. But the trust itself costs money to create and administer, and may or may not be a great option once again depending on the amount and time-horizon, as well as the needs of the child.

That’s the Minor Settlement Approval process in a nutshell. It can get complicated, and I don’t recommend doing it on your own without an attorney. If you have an injury claim, call me at 919-929-2992.

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Jeffrey Allen Howard, Attorney at Law, PLLC
1829 E. Franklin St. - Bldg 600
Chapel Hill, NC 27514

(P) 919-929-2992
(F) 919-636-4779

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