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What is a Minor’s Compromise?

These days, we live in a divided world. Everything from political parties to pop culture seems to a topic of controversy, leading to some contentious conversation around the dinner table, in the courtroom, and everywhere in between. However, there is one thing that it seems everyone can agree on: children are precious and need to be protected.

There are many laws and procedures on the books intended specifically to protect the youngest among us, and tort law is no exception. One such procedure is the minor’s compromise, which protects the right of minors who are entitled to payment from a personal injury lawsuit.

But how does this compromise work, and how can you make sure your child receives what he or she is owed? Here is everything you need to know.

Minors Compromise child parent personal injury

What is a Minor’s Compromise?

In a typical personal injury settlement, the injured party and the injurer (a driver who hit them, a corporation, a negligent doctor, etc.) sign a contract to put an end to all litigation. This contract thoroughly explains the compensation amount for the victim, and well as any other stipulations (like an agreement not to seek further restitution in the future). Both parties sign the contract, payments begin after an agreed upon time, and everyone continues their lives.

But when a personal injury case involves a child, things can get a bit messier.

The law dictates that children lack the capacity to understand and enter into contracts, which means that they cannot sign the contract necessary to receive payment from a personal injury settlement. In fact, most insurance companies will not pay personal injury settlements above $5,000 to a minor without a court order – and they won’t pay settlements over $50,000 to a minor without a hearing with a judge present.

To prevent children from missing out on the justice they deserve, the California counts have instituted something called the minor’s compromise. This allows an adult to sign a settlement agreement on behalf of a minor so he or she can receive money from their personal injury case.

The Purpose Behind the Process

The minor’s compromise is meant to protect the interests of the child. If he or she is entitled to compensation for medical bills, loss of earning potential, emotional damages, or any other form of restitution, he or she should be able to receive that regardless of their age.

However, it is also essential that the child fully understands the terms of the settlement. This is why insurance companies require a hearing: they want to be certain that the child understands all the terms and stipulations spelled out in their contract. The minor’s compromise helps guarantee that the agreement is fair – and that the child and his or her family understand it.

Minors Compromise child parent personal injury

Who Can Sign a Minor’s Compromise?

If a minor receives money through a personal injury settlement, their guardian can sign a minor’s compromise to ensure they receive payment. However, the person who signs the contract will depend entirely on the child’s home situation.

Either parent can sign the contract if they both live with the child. However, if the child lives with only one parent – or if the parents share custody of the child – only the custodial parent (the primary parent who lives with guardian) or a legal guardian appointed by the state can sign the agreement on the child’s behalf. This ensures that the person who signs the agreement is someone close to the child who has his or her best interests at heart.

What Happens to the Money?

In a minor’s compromise, the court (and the individuals paying the settlement) want to guarantee that the child receives the money due to them. Therefore, the courts must take steps to ensure that the child’s parents or legal guardians cannot have any way to access the settlement money.

The most common way to guarantee security of the funds is to place them into a blocked account or settlement annuity. The funds are only available for withdrawal by a court order, and in some cases, they are unavailable until the child’s eighteenth birthday. This makes sure that only the child receives their settlement money – and even they won’t have access to those funds until they are an adult.

However, there are some exceptions to this rule. It is possible for the child’s parents to gain temporary access to the settlement money, provided they can prove that the funds are going to cover the child’s medical expenses or basic needs like food and shelter. This guarantees that the child’s needs are met, without allowing other people to benefit from the restitution the child deserves.

Minors Compromise child parent personal injury

Learn More with TorkLaw

The minor’s compromise is just one of the many ways that our court systems work to provide justice for injured individuals after an accident. But even though the courts seek to serve victims, navigating the legal system can be a daunting task. This is why it’s absolutely necessary to have a smart, experienced, and dedicated lawyer on your side.

If you, your child, or another loved one has been injured in an accident, please contact the legal professionals at TorkLaw today. Our award-winning team has decades of experienced fighting for victims like you, and we will work tirelessly to get you compensation you deserve.

Contact TorkLaw today to discuss your case with one of our attorneys. We will give you our professional advice completely free, and help you start the process of getting justice.

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