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Structured Settlements For Minors

Structured Settlements For Minors is a great approach for both personal injury cases as well as in divorce proceedings. It is a lot easier to get child support from a structured-settlement than an angry ex-spouse. Also, this method can get rid of expensive start-up and continuing guardianship-fees.

If you are looking for flexibility within the agreement, a structured-settlement will fit the bill. You can schedule when the minor is to receive funds after reaching the age of majority. Future payments can be set-up for college-tuition, car purchase, or a down payment on a home, and the list is endless.

Structured-settlements for minors are unique fiduciary instruments, which are used in common practice in the United States, and many other countries. Prior to the use of this concept, insurance-carriers were required by the courts to pay-out large cash settlements to the parents or legal-guardians of minor-children.

Parents Could Not Be Trusted With Cash Settlements

The problem was that parents would take the proceeds of these suits, and spend the funds on unrelated expenses, and sometimes quite flagrantly. Within a short amount of time, the funds were gone, and the minor-child was left without the funds that were meant to take care of their future needs, such as medical-expenses.

The Federal Government, as well as various states, recognized that something had to be done to protect the interests of minors. They could see that structured-settlements were a great vehicle to place some controls on where the money goes, and when. The Federal Government passed its own legislation governing structured-settlements, and the states soon followed suit. (No pun intended).

The Settlement Agreement Can Provide For Future Needs

In many personal-injury cases where a minor is involved, the need to meet future medical-expenses become of paramount importance. Within the annuity can be provided not only the monthly payments, but a specific-allotment of funds for medical expense-payments. Also within the agreement can be future lump-sum payments for various life-events, such as a lump-sum upon high-school graduation, etc.

The Defendant Saves Money

Not only is this a great idea for the minor-child, but the Defendants actually save money by using a structured-settlement agreement. In the past, a $1M settlement was just that, and the insurance company had to pay out the lump-sum of $1M, to the parents or legal-guardian of the minor child.

Now, this $1M settlement is purchased by the defendant as an annuity for the claimant. Face value may be $1M, but it can be bought for approx. $600K, resulting in a significant-savings. Everybody wins with Structured Settlements For Minors.