QUESTION
Why do I have I to put my 15 year old settlement in a trust fund?
Asked on Apr 27th, 2012 on Personal Injury - Massachusetts
More details to this question:
My 15 year old was hit in the crosswalk now the insurance is settling out of court but a judge have to approve the amount. I don't even know how much are the lawyers asking the insurance for? But the lawyer told me that the judge is going to tell me to put the money in a trust fund. The check is being made in my name.
3 ANSWERS
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The reason the money will be put into a trust fund is because the money belongs to your child, not to you. As such, the money is to be held, in trust, for the child's benefit. The judge may put certain restrictions on how the money is to be used as well (health/education/etc.).
Answered on May 01st, 2012 at 12:40 PM
A judge will often (but not always) ask that the money be put in a structured settlement to be paid after the minor reaches majority age. It is done for the protection of the child because it is his/her money. Many times irresponsible parents take the money and spend it for themselves and the law tries to protect the minor so this doesn't happen. However, the money does not necessarily have to be structured. The judge may be okay with the money being disbursed now, but will still want a trust set up with a trustee in charge of the money to protect it until the child is 18.
Answered on May 01st, 2012 at 12:33 PM
You should have your attorney explain how this relates to your child's case specifically. You will have to be informed of the proposed Generally, because your child is a minor, your child cannot enter into any type of legally binding contract, such as one for settlement of a law suit. Therefore, you will be acting on your child's behalf, including accepting payment, based on the assumption you, as the parent, are acting in the child's best interests. However, because it is your child who was injured, the settlement money actually belongs to him/her. In order to safeguard the funds against possible abuse by the parent, the money must be placed in a trust until the child is an adult. It is not a reflection on you in any way.
Answered on May 01st, 2012 at 12:33 PM