February 11th, 2022
What You Need to Know About Personal Injury Settlements For Minors
Author: Naila A. Herrera
Getting into an accident with your child in the vehicle is a frightening experience. If your child is injured in the accident, you can pursue a claim on your child’s behalf to get compensation for what they went through, Among the many factors to consider following the accident, it’s important to know that there are laws governing any money recovered by or for a minor as a result of an accident. Under Maryland law, any substantial sum of money paid to a minor must be preserved for the benefit of the minor.
There are certain steps a parent or guardian must take to ensure that the minor’s settlement money is preserved in compliance with the law.
Here are some frequently asked questions (FAQs) to guide you
What individuals are covered by this law?
A person under the age of 18 who resides in Maryland at the time of the accident or at the time the money is paid.
What is considered a substantial sum of money?
The law defines a substantial sum of money as $5,000 or more after paying attorneys’ fees, medical expenses and costs associated with the case.
If a minor nets less than $5,000 are there limits on what a parent or guardian can do with the money?
If the total amount the minor receives is less than $5,000, the check may be made out to a parent or legal guardian. That individual may deposit it in a personal bank account and should keep the money for the minor’s benefit.
What needs to be done if the net sum is more than $5,000?
If a minor recovers a net sum of $5,000 or more, the check must be made payable to either a court appointed guardian of the minor or a trustee for the minor. The check must then be deposited into an account for the minor. It cannot be deposited in the personal account of the parent, guardian or trustee.
The account, whether it’s a bank account or an investment account, must be designated in the minor’s name and the funds held until the minor turns 18, at which point the minor gets access to it.
What does trustee or court appointed guardian mean?
In this case, a trustee is anyone who will be responsible for the money. The good news is that there is no court paperwork required to create a trustee, they just need to follow the regulations set by the law in the handling of the money. However, the court may appoint a guardian of the property of the minor if it determines that appointing one would be in the minor’s best interest.
Can a trustee, parent or guardian withdraw money from the minor’s account?
The bank should not allow the withdrawal of any money except to pay it to the minor upon reaching the age of 18 or to pay the personal representative of his or her estate upon the death of the minor. If the minor needs the funds prior to turning 18, a trustee may file a petition with the court to ask to withdraw funds. The petition must state, in detail, the purpose of the withdrawal and the court may ask any questions it finds necessary before granting or denying the petition. The court requires a strong showing of necessity for any expenses beyond medical or educational requests on behalf of the minor.