When we settle a minor’s claims, parents are sometimes surprised to learn that the children don’t get the money right away. Instead, the money is typically either deposited with the court until the child turns 18 or used to buy a structured settlement. A structured settlement is an annuity that pays a child a set amount at regular intervals once the child turns 18 (these typically earn more than money just being deposited with the court, and parents are also rightfully concerned about kids receiving a lump sum of money on their 18th birthday that the kids can immediately squander away).
When I’m explaining this to clients, they frequently ask why these rules exist. Today, I saw an article that explains exactly why we have these rules.
In Kaysville, Utah, a father is being criminally prosecuted for taking money from a trust account set up for a daughter as part of her lawsuit settlement. In that case, the daughter was injured in school, and it appears that the case resulted in a $100,000.00 settlement. After paying the attorneys’ fees and paying for the girl’s medical expenses, roughly $61,000.00 was put into a trust account for the girl with an order that no money was to be withdrawn from the account without permission of the court. Unfortunately, the dad allegedly withdrew the money and is now being prosecuted.
Sadly, these kinds of things happens too frequently, which is why Texas rules require a minor’s settlement funds to be put in control of the registry or invested in a structured settlement.
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