What is a Minor’s Compromise?

Children unfortunately get injured in car crashes too. If a personal injury claim involving a minor child under the age of 18 reaches a settlement, that minor cannot lawfully sign off on a settlement agreement on their own. While in some cases the parent/guardian of the minor can sign off on settlement, when it comes to bigger funds, the interest of the minor must be put first. Due to this, the State of California has procedures in place to protect minors and personal injury settlements they may receive.

Settlements Under $5,000

In cases where the total settlement is below $5,000, California Probate Code Sections 3611(d), and 3401 have routinely allowed custodial parents to manage the settlement funds directly on behalf of their minor children, not requiring the filing for court approval.  Typically, all the major insurance carriers in California routinely waive the Minors’ Compromise and hearing when the settlement amount to the injured child is below $5,000.00 as well. This is because California law permits Judges to order the funds to be paid directly to custodial parents if the total settlement is $5,000.00 or less.

If the total settlement for the minor exceeds $5,000.00, then a Minor’s Compromise and a subsequent hearing must commence.

The Process

If the minor’s case settles before a lawsuit is filed, then a case must first be initiated with the court. Once the case is opened with the court, a Guardian Ad Litem for the minor must be appointed and approved. This individual can be the minor’s parent, if they are not also involved in the claim, or any adult in proximity to the minor.

A Petition for Approval of the Compromise, along with a proposed Order Approving the Compromise must be prepared, as well as Banking documents to Order Funds to be Deposited in a Blocked Account must be completed in their entirety. There are additional forms, account types, and attachments that the above require as well depending on the case. Once filed with the court, a hearing is assigned.

At the hearing, the Judge will hear from the minor, their guardian ad litem, and their attorney. If the proper paperwork is in order, evidencing that the settlement is fair, then the Judge can approve the compromise, and will typically order the funds to be deposited into a blocked account.

Why?

Opening the blocked account gives assurance to the court that the funds will be used solely to benefit the minor.

Unless there is a special circumstance in which the funds are immediately needed to pay for the minor’s ongoing medical care or other necessities like food and shelter, the funds will be ordered into a blocked, interest-bearing account or annuity. No person, not even the minor, the minor’s parent/guardian, or the minor’s court-appointed guardian, will have access to the funds, except for the minor on or after their 18th birthday.

Call Today for a Free Consultation

Have you or your minor child been in injured in a car crash? Let us discuss your legal options in a free consultation. If you have a valid claim, we are ready to conduct an investigation and help you determine the best course of action. Our law office is ready to help, contact Ray Padilla Law, APC today at (619) 431-1187 (San Diego) to speak with Attorney Ray Padilla directly.  Please call even if it’s simply to ask, “what should I do?”