MINORS’ SETTLEMENTS – WHERE THE MONEY GOES
Injury cases for minors require court approval in the State of NC. But where does that money go when it’s approved?
Let’s start where it doesn’t go: It does not go to the parents. The concern is that it would be spent for some other reason than for the minor, so the courts don’t allow this. But what do they allow?
The most common option is to give the money to the Clerk of Court. It will be conservatively invested and the minor can come get it when they turn 18. The minimal fees that the Clerk charges will eat up whatever minimal returns the money makes, so it should be roughly the same as the principle. The Clerk has authority to release funds when the minor requires them, but that’s discretionary, and as a matter of practice, doesn’t happen a lot.
The defendants can also purchase an annuity that will pay the child over time. This will normally have the money being essentially in reserve until the child reaches a target age, at which point periodic disbursements can begin, or perhaps a lump sum.
You can also have a trust created for the child. This is kind of like the Clerk option, but a private version of it. A trust would have to be drafted outlining the rules for the funds. A trustee (not a parent!) would be appointed and they would be responsible for following the rules of the trust. That trustee would have authority, under those rules, to disburse funds when it was in the best interests of the child. This allows the child more access, in theory, but the cost of the trust is somewhat high, and a court isn’t guaranteed to accept it.
If you’ve got an injury claim for a minor, call me. 919-929-2992.
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