A minors’ compromise and release hearing is required by California law if a child under the age of eighteen is injured and receives a monetary settlement from the at-fault party.
This means that a guardian must be appointed by the court unless the child is legally emancipated, a judge must approve the settlement for your injured child, and the settlement funds must generally be deposited into a blocked account in any FDIC-insured bank, trust company, savings and loan associate, or similar financial institution located in the state of California, until the child is eighteen years of age.
The settlement funds can also be invested in a vehicle like an insurance annuity contract (single-premium deferred annuity). Alternatively, you can have a portion of the funds deposited in a bank and a portion of the funds deposited in an investment vehicle. Please see other articles on this website for more information, or your child’s injury lawyer can explain which method is best for depositing settlement funds.
California Court-Supervised Settlements for Injured Minors
According to California Probate Code Sections 2504,90 3500,91 3600,92 and California Code of Civil Procedure Section 372.93, an enforceable settlement of a child’s injury case can only be consummated with California court approval. The whole point of a court-supervised settlement for injured minors in California is to:
Appoint a guardian to assist the minor child in monitoring his or her settlement funds.
- Ensure that the settlement is fair and equitable to the minor, and
- Obtain a court order to obtain the settlement funds
- Make certain that the minor receives the entirety of his or her settlement funds when he or she becomes an adult.
In California, the court process is the best way to approve and monitor a bodily injury settlement for a minor. After the court approved their child’s injury settlement and deposited the funds into a bank account, parents approached me to petition the judge for an early release of part of the funds that didn’t directly benefit the minor. Some parents forget that California’s court process exists to protect the child’s interests because the settlement funds belong to the child. Courts will allow an early release of funds, but they closely scrutinize such requests and require that the money benefit the minor directly.
Why Courts Must Supervise Minor Settlements in California
Courts supervise minor settlements in California to ensure that children receive full protection under the law. Judges appoint guardians, evaluate the fairness of settlement terms, and oversee fund distribution. This process ensures that parents, insurance companies, or other parties do not misuse the minor’s funds. The courts take an active role in protecting a child’s financial interests until they turn eighteen. Without this safeguard, many minors could lose access to money that was rightfully theirs. The legal system prioritizes the child’s well-being above all else and aims to prevent financial exploitation or irresponsible use of settlement proceeds.
What Happens at a Minor’s Compromise Hearing?
At a minor’s compromise hearing, the court reviews all settlement documents and hears from the guardian and attorneys involved. The judge examines the proposed settlement amount, attorney fees, and any medical liens or expenses. If the judge finds the settlement fair and in the best interest of the child, they approve it. Once approved, the funds move into a blocked account or annuity. Parents and guardians must present clear justification for any early withdrawal requests. Judges often ask questions to ensure that the settlement truly benefits the minor. They also check that the agreement complies with California Probate Code and Civil Procedure requirements.
How Parents Can Prepare for a Minor Settlement Case
Parents must gather key documents and understand the legal steps before attending a minor’s settlement hearing. They should consult with a personal injury attorney to file the proper paperwork, including a petition for approval and financial documentation. Courts expect parents or guardians to fully explain how they will use and safeguard the funds. Parents should also discuss blocked account options or annuity investments with financial advisors. Courts want to see responsible planning to protect the minor’s future. Preparing thoroughly not only helps ensure a smooth court process but also builds trust with the judge, increasing the likelihood of approval.
For more information on California’s court procedures for minor settlements, visit the California Courts Self-Help Center on Minor’s Compromise.
Settlement for Injuries to a Minor Child (Settlements Under $5,000)
If the monetary settlement is less than $5,000, California Probate Code Sections 3611(d), 94, and 340195 have routinely allowed custodial parents to manage the settlement funds directly on behalf of their minor children, avoiding the need for court approval. In fact, all of California’s major insurance carriers routinely waive minors’ compromise and release hearings when the settlement amount to the injured child is less than $5,000.
Judges do not require court approval for settlements under $5,000. Judges can choose to place the minor child’s funds in a blocked account with court-approved withdrawals. They may also order direct payment to the custodial parent(s).
Looking For An Attorney
Are you looking for an attorney to help you with your case? Look no further, Kaass Law will be able to provide you great experience, knowledge and satisfaction. Fell free to call our office at 310.943.1171.