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.

What is a structured settlement for a minor.

A structured settlement is one of the safest financial tools out there. This is set by state law and is the topic of this article. 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. Special needs trusts and other options.

Please seek the advice of a qualified professional before making financial decisions. 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. Other payment options for minors exist including trusts and guardianship accounts. Structured settlements for minors are usually paid through an annuity from a life insurance company just as for adults.

Structured settlements for minors. Court approval is required for all settlements involving minors no matter how small the sum. The funds may commonly be used to pay for medical bills therapy rehabilitation or other similar expenses for the child. Choosing a structured settlement for a minor may also speed up court approval because this arrangement is designed to protect minors interests.

Structured settlements are considered ideal for ensuring that an underage child s cash settlement is preserved and spent appropriately. Structured settlements only apply to large personal injury cases usually involving policy limits settlements of at least 100 000 00. 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. A structured settlement annuity for minors is typically established by the court to provide for an affected party financially.

The key difference between an adult owning a structured settlement and a minor owning one is control. Structured settlements are regulated by insurance companies. Structured settlements reduce the risk that anyone will embezzle misuse or withhold large sums of money belonging to the injured claimant. Settlements involving minors introduction.

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. Structured settlements started in the late 1970 s and they are a big business.