How is a Minor Child’s Money Handled in a Personal Injury Settlement?

Question:  

My daughter was a pedestrian that was hit by a car and suffered some serious injuries.  She is a minor.  I want to bring a claim or lawsuit against the responsible party.  But I was told that the money would be placed in an account set up by the court until she is eighteen years old.  Is that true?  Can I get the money out earlier if I need it?

Robert’s Answer:  

For the most part, that is correct.  Whenever a minor is involved in a personal injury case, the claims are basically divided into two parts.  The first part are the claims that actually belong to the minor’s parents or legal guardians in their individual capacity.  One example would be the medical bills.  The parent may sue for recovery of the medical expense of their child because, under Texas law, a parent is responsible for maintaining the health of their child while the child is a minor.  So, if a minor child is injured due to someone else’s negligence and needs medical treatment, then the claim for those medical bills belongs to the parent of the minor child.  This would also go for the attorney’s fees and case expenses if the parent chooses to hire a personal injury attorney.

The second part of the minor’s claim includes those damages that are personal to the child.  Common examples would be pain and suffering, physical impairment, mental anguish, disfigurement, etc.  These claims belong to the child.  However, under Texas law, a minor cannot bring a lawsuit individually.  They can only do so after they turn 18 or are otherwise emancipated.  But a parent can act as the personal representative of the minor child and bring those claims on the child’s behalf.  This means the parent would be acting as the “next friend” of the child.

That is why you see personal injury lawsuits involving minor children styled like this: “John Doe, Individually, and as Next Friend of Jane Doe, a minor….”  John Doe is bringing suit for his own individual claims as the child’s parent, such as the medical bills.  And John Doe is also bringing suit as “Next Friend” of his minor child for the child’s claims.

If their is a settlement or award of any money in the case, the funds are divided.  One portion is allocated for the medical expenses and any attorney’s fees and cases expenses.  The remainder is allocated for the child.  However, the court needs to protect that money for the child.  Likewise, the child’s portion is put into a trust account maintained by the court where it will gain a certain rate of interest.  When the child turns 18 or is otherwise declared an adult, the money is released to the child.

The parent may petition the court for early release of some or all of the money.  However, the Court will only agree to do so if the court feels like it is in the best interest of the child.  Normally, the court will not allow the parent to have any of the money for the parent’s own financial reasons.  This is because the court views the money as compensation that belongs to the child and not for the financial benefit of the parent.