Structured Settlement for Minors Guards Their Financial Interests Until They Reach Majority

In many cases where lawsuits involve children or their parents they can receive a settlement when they win the lawsuit.

If the children are minors this will be in the form of a structured settlement.

This aims to preserve as much of the cash as is possible until they turn 18 and are able to legally able to take charge of their entitlement.

This settlement can come from a court decision or through the defendants settling of large cases where children are involved. The objective of these structured settlements takes into consideration the long term financial stability of the child.

This results in courts or lawyers taking the necessary steps to protect the financial future of the minor. This is done by structuring the settlement amount into a schedule of periodic payments.


These settlements, mainly through insurance companies, can be as a result of workplace accidents.

Car accidents in which a parent or parents die or are severely injured, can result from product liability claims, and even be a result of severe injury to the child. The advantage of periodic payments is beneficial to the minor as the money is then used for food, clothing, and shelter, all of which are long term necessities that are considered essential. It can also be used for future school and college education as well as any needed continuing medical care.


Structured settlements are in the form of annuities from insurance companies and are similar to any structured settlements that adults often agree to. There is a difference between the two, as in the case of adults they retain control of the settlements, while in the case of minors this control is exercised by guardians or parents, who are required to conform to the orders of the court that dictate how the money can be spent.

As a result, the guardians or parents entrusted with the settlement funds have restricted use of the funds and are answerable to court-appointed managers or insurance commissioners.

Needs Of The Child

Every structured settlement of minors must ultimately ensure that besides caring for the needs of the child, some money is left over when the child turns 18 and the child can then take control of these remaining funds from the settlement. These settlements are tax-free and even any income from interest remains tax-free.

The overall return rate is fixed and is regulated by commissioners, and the money remains protected. Such payments can also go into guardianship accounts or structured trusts that have tax benefits. Such trusts will result in a reduction of the settlement account as fees are involved.

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