Georgia law has recently changed as it pertains to minor settlements. On May 2, 2022, Governor Brian Kemp signed House Bill 620, amending Title 29, which changed the threshold for minor settlements from $15,000 to $25,000. This blog has been updated to reflect those changes.
If a member of your family is injured due to someone’s negligence but cannot handle his/her personal injury claim, what can you do as a loved one? When a child is injured, a parent can pursue a personal injury case.
Personal injury settlements for minors involve unique considerations. An experienced personal injury attorney in Alpharetta can help your family seek justice. Call Horst Shewmaker today for a free consultation.
Personal Injury Lawsuits Involving Minors
If the injured individual is a minor (Georgia law defines a minor as anyone under the age of 18), the child’s personal injury claim is “split” between the parent and the child. Any medical expenses the child incurred for medical treatments are vested with the parents. However, the child’s pain and suffering claim is held by the child.
If the case is unable to be settled pre-suit and a lawsuit must be filed with the court, both the parent and the child must be named plaintiffs. This is an important detail. The failure to name both parent and child means there will not be full compensation for the child’s injuries and damages.
Generally speaking, the parent may assert the child’s claim simply by being the child’s parent. There is nothing “extra” that needs to be done. There is complexity, however, when it comes to settling the claim.
Personal Injury Settlements for Minors
Let’s look at three different types of personal injury settlements for minors.
Settlements Under $25,000
Georgia law is strict when it comes to allowing a parent to settle a minor’s claim. If the case is not yet in a lawsuit and the “gross settlement” (amount paid by the insurance company) is $25,000 or less, the parent may settle without becoming the conservator of the minor and without court approval.
In short, pre-lawsuit settlements under $25,000 require nothing more than the insurance company issuing the check to the minor’s parent and the parent signing the release prepared by the insurance company.
Settlements Over $25,000
When the gross settlement is more than $25,000, the settlement requires court approval. Reaching a settlement requires approval by a judge. There are a few different criteria that will determine the judge and jurisdiction.
- If a suit was filed, the judge where the suit was filed is the judge who must approve the minor’s settlement.
- If no suit is filed, then the parties must seek approval from the probate judge in the county where the injured child resides.
- In either case, if the judge rejects the parties’ settlement as unfair to the minor, the parties must re-negotiate.
In certain scenarios, an alliance will develop between the insurance company and the minor’s parent as they work together to convince a judge the settlement is fair. But ultimately, the case cannot be settled without court approval.
Settlements Over $25,000 with Parents as Conservators
When it comes to lawsuits involving minors, the most complex settlements are those that fit the following scenario:
- The gross (total) settlement is more than $25,000
- As part of the settlement terms, over $25,000 will be paid out to the parents before the injured child reaches the age of 18.
In the above situation, not only must the settlement be approved by a court, but the parent(s) must also be named conservator of the minor by a probate court. This process can be slow, cumbersome, and expensive. Those who handle minor settlements will do just about anything they can to avoid this scenario.
The key to avoiding a situation where the parent must be named conservator is to make sure the minor’s parent receives no more than $25,000 before the minor turns 18. Attorney’s fees, litigation costs, and medical expenses do not count in terms of money paid to the minor’s parent.
Ok, that is a lot of information so let’s look at an example of how this might work.
Example: Personal Injury Settlement for Serious Injury to a Minor
A child is seriously injured. He has $100,000 in medical expenses. The parents hire a personal injury lawyer and agree to pay the attorney 40% of the gross settlement. In the event a personal injury settlement is reached, the parents also agree to pay all case expenses (which total $10,000).
The case settles for $500,000. The settlement will appear as follows:
- Gross settlement: $500,000
- Attorney’s fees (40%): $200,000
- Case expenses: $10,000
- Medical expenses: $100,000
- Monies paid to parents: $190,000
The settlement must be presented to a judge (since the gross settlement is over $25,000) and the parent must be named the child’s conservator (since the parent is being paid over $25,000).
The judge might question whether all the settlement proceeds will be used for the child’s benefit. The parent could use the settlement funds for their interests instead. While the judge might approve the settlement, it is more likely the settlement will be rejected.
So what should be done? Remember, the sticking point here is the monies paid to the minor’s parent before the minor reaches the age of 18. In other words, if payment of the money is deferred until after the minor reaches 18 years old, then the judge’s concern about the parents taking advantage of that money is no longer an issue.
So then, what is the solution?
Structured Settlement
A structured settlement is a settlement paid out as an annuity rather than in a lump sum. Instead of a parent being paid a lump sum at the time the settlement is finalized, the insurance company will purchase an annuity so that the minor receives the money in installments after the minor has reached the age of majority.
The parent can become creative in how the money is paid out so that the minor receives installments at certain points in his life that correspond with life events (i.e., graduating high school, college, etc.).
The annuity can pay out on almost any terms the parent wishes so long as the first installment begins after the minor turns 18. Numerous companies can provide structured proposals including Ringler Associates, Inc. and AIG.
Example: Structured Settlement for Serious Injury to a Minor
So let’s return to our hypothetical. But this time let’s assume some of the funds are structured.
- Gross settlement – $500,000
- Attorney’s fees (40%) – $200,000
- Case expenses – $10,000
- Medical expenses – $100,000
- Funds structured – $180,000
- Monies paid to parent $10,000
As before, a judge must still approve the settlement since the gross settlement is in excess of $25,000. That has not and will not change. In this example, the funds paid to the parent on behalf of the minor are less than $25,000. As a result, the parent is no longer required to be named the conservator of the minor by a probate court.
While the money is sitting in the annuity, it is accruing interest. The total money paid to the minor will be greater than if the parent received the money at the time of the settlement because of the added interest. It is an easy case to make that this payout is in the best interests of the minor. As a result, this settlement will almost certainly be approved by the court.
Contact Us Today for a Free Consultation
Settlements involving minors are complex. A single misstep can unravel a settlement and force the parties back to the drawing board. The involvement of legal counsel is a must to avoid the many pitfalls Georgia law has created for parties attempting to settle a minor’s claim.
Our team at Horst Shewmaker is here to help you. We have handled countless minor settlements, and we can handle yours. If you are in such a situation, please call (404) 400-1175 or contact us online today.
Related: What Is the Average Settlement for a Child in a Car Accident in Georgia?
