If your child has been injured due to someone else’s negligence, you may be wondering what happens if they win a personal injury lawsuit in California. Unlike adult cases, settlements or verdicts involving minors come with added layers of legal protection and oversight. These laws are in place to ensure that any compensation awarded truly benefits the child—not just in the short term, but well into adulthood.
At Law Offices of Michael A. Kahn, we understand how emotional and complex these cases can be. Here’s a clear breakdown of what you can expect when a minor wins a personal injury lawsuit in California.
A Parent or Guardian Must File the Lawsuit
Since minors can’t legally file lawsuits on their own, a parent or legal guardian must act on their behalf. This representative is known as a guardian ad litem—a person appointed by the court to protect the best interests of the child throughout the legal process.
Even if a case settles out of court, any agreement involving a minor must be reviewed and approved by a judge.
What Is a Minor’s Compromise?
In California, when a minor is awarded compensation—either through settlement or trial—it must go through a process called a Minor’s Compromise. This is a court-approved agreement designed to:
- Ensure the settlement is fair and reasonable
- Protect the funds until the child turns 18
- Confirm that attorney’s fees and medical expenses are handled properly
This is not just a formality. The judge plays an active role in reviewing the details to make sure the child’s rights are fully protected.
Where Does the Settlement Money Go?
The court will determine how the money should be held or managed until the child reaches adulthood. There are several common options:
1. Blocked Bank Account
In most cases, the court will order the funds to be deposited into a blocked account. This means the money cannot be accessed or withdrawn without a court order until the child turns 18. The bank will usually provide written confirmation to the court that the account is properly set up and restricted.
2. Structured Settlement
Another option is a structured settlement, where the money is placed in an annuity that makes scheduled payments to the child once they reach a certain age. This approach can provide financial support over time—for example, at age 18, 21, and 25—rather than in a single lump sum.
Structured settlements are often used in cases where the compensation is substantial, helping to avoid mismanagement or overspending when the child comes of age.
3. Special Needs Trust
If the child has a disability, a special needs trust may be appropriate. This allows the funds to be used for their care without affecting their eligibility for government benefits like Medi-Cal or SSI. Setting up a trust involves careful planning and usually requires an experienced attorney.
Can Parents Use the Money?
Generally, no—the money belongs to the child, not the parent or guardian. However, parents may request that a portion of the funds be used to reimburse out-of-pocket medical expenses or related costs, but this also requires court approval. The goal is to prevent misuse and ensure the compensation serves the child’s long-term interests.
What Happens When the Child Turns 18?
When the minor turns 18, they gain legal access to the funds. If the money was held in a blocked account, it is released to them. If it was placed in a structured settlement, payments will begin according to the schedule.
While the legal protections end at 18, Law Offices of Michael A. Kahn always advises families to discuss financial planning to help young adults manage their settlement responsibly.
Protecting Your Child’s Future Starts Now
Winning a personal injury case is just the first step in securing your child’s future. At Law Offices of Michael A. Kahn, we’re here to guide you through every stage of the process—from filing the lawsuit to navigating the court’s approval of the settlement. If your child has been injured due to someone else’s negligence, call (310) 209-1600 today for a free consultation. Let us help protect what matters most.
