My Child Is Getting A Settlement, What Happens To The Money?
(Part 1 of 2)
Every year in southern Oregon children fall victim to personal injury. They are more likely than adults to be attacked by dogs, they are frequently injured as pedestrians or bicyclists, and occasionally are even involved in accidental shootings. In these cases the child victim is entitled to make an injury claim the same as an adult would be. However, the settlements, lawsuits, and money must be handled a little differently on behalf of a child.
First, Oregon law dictates that if the settlement is less than $25,000 it is acceptable for the parents or legal guardians to negotiate, settle, hire an attorney and in all other ways act as the child’s fiduciary. In these cases the settlement must be deposited into a savings account held in the child’s name only. The account will then be available to the child when he or she turns 18.
If the personal injury settlement amount is greater than $25,000, Oregon law requires the court to be involved. The court must approve the settlement and then approve the proposed disbursement. Most courts will only approve a disbursement that puts the money into a frozen bank account until the child is 18. Frozen means that no one can withdraw any money from the account without court approval.
Often times parents will petition the court for approval to release funds for purchasing a new computer, clothes, or vacation for the family and the child. The court will vigorously protect the child’s money and will emphasize that the parent’s obligation to provide for the child are not decreased or subsidized by the child’s settlement. The courts may approve a distribution of funds for one of two reasons:
1. The money will be used for the child for a purpose that relates directly to the injury suffered
2. The money is reimbursing a parent for losses they suffered as a result of caring for the child’s settlement related injuries
Under the first exception, if the child had a medical expense that was related to the accident, then the court will allow partial distribution of the money for that. If the child is covered by health insurance, it would be much wiser to use it, rather than use up the child’s settlement money.
The second exception must be used sparingly. The courts will assume that as a parent, you accept the responsibility to care for your child when they are injured and you will not expect financial compensation for it. If however, a parent was required to purchase special medical supplies or equipment, the courts will consider reimbursement.
Continue to reading part two of this series by clicking here