When a child is involved in a personal injury or wrongful death case, court approval is usually required for settlement. This prerequisite protects the child’s interest, ensures they’re compensated properly and that their money will be invested wisely.
A structured settlement can speed up court approval because they‘re proven to protect minors’ interests. Structured settlements reduce the risk of money being misused and provide the child with payments over time for their future needs.
Structured settlements are funded by highly rated life insurance companies, which are among the safest investments available. This means your client will have the flexibility to schedule payments after the child reaches the legal age of majority.
Benefits of Structured Settlements for Minors
Knowing that there’s guaranteed income for a minor provides security and peace of mind to your client. Some additional benefits are:
- Income and interest earned is tax-free
- Interest rates are fixed and guaranteed
- No fees or expenses
- Payments may be made monthly, bi-annually, annually or in scheduled lump sum payments
- Payments are guaranteed by highly rated life insurance companies
- Payments may be directly deposited into a checking or savings account
- Ongoing payments can be in level amounts or can keep up with inflation by using a Cost of Living Adjustment (COLA)
Payments for Future Expenses
Since the settlement plan allows you to tailor income to the child’s needs long after he or she becomes an adult, the payments may include lump sums for future expenses such as:
- College tuition, books and fees as well as living expenses – payments can be paid each semester when the tuition payment is due
- Purchase of a new home
- Purchase of a car
- Medical care and equipment
There are many ways to design a structured settlement for a minor and it’s a critical part of the settlement process. You and a knowledgeable structured settlement consultant can be instrumental in assisting your client in finding what best works for the minor.
To learn more about structured settlement options for minors, please contact us today.