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Posted in Personal Injury on March 17, 2021   |  by Gary Burger

What to do with Minors' Money - Structured Settlements.

I talked in my last newsletter about a large minor settlement in a medical malpractice case and what to do about confidentiality.

The second issue is that arises in these types of cases is what to do with the settlement money. Missouri has a statute that says that if the net amount to any minor over $10,000, a conservatorship or guardianship, restricted accounts or other safeguard is mandatory.

The statute reads:

507.150. Bond of person acting for infant, when — effect of failure to give. — 1. Before a next friend or guardian ad litem can receive or receipt for any money or property, personal or real, and before he can acknowledge satisfaction or discharge of any judgment, he must execute a bond to such infant; except, that no bond shall be required if the total value of the property or money, exclusive of expenses and fees approved by the court, is not in excess of ten thousand dollars and all of the money or property is to be turned over to the infant or his parent.

All minor settlements have to be approved by Courts in Missouri and Illinois. There are a couple of ways to safeguard the settlement money for the child.

First, you can file a conservatorship where the Court takes jurisdiction over the settlement funds until the minor reached the age of 18. Another option for some judges, for a smaller settlement amount, will put the money in a restricted account so the money can only be withdrawn for the benefit of the minor or by Court approval or Court order.

The third most common way to handle this is to set up a structured settlement. This is the purchase of an annuity from a well rated and well-bonded insurance company that agrees to payments in the future after the child reaches the age of 18.

Typically, we set this up for some payments for college and then space out payments much later after the age of 18. I find it very few 18-year-olds make smart decisions about money, so I encourage my clients to the extent those payments out further in the future.

This structure checks a couple of boxes also. It ensures the money goes solely to the use for the minor and when the minor reached the age of majority.

Second, it makes the interest in the money non-taxable. Personal injury settlements are nontaxable and even if the money is saved in a structure and earns interest on that when it eventually paid to the recipient, that is still not a taxable event. So, no income or any taxes are charged on that amount.

I always use my friend Tom Parmelee for structured settlements. For more information about structures, go to his website: Or call Tom at 314-768-7632. He and his brother have been doing this for decades and are great people.

We work with the parents to make sure the payment schedule is what they want for their child.

As always, call Burger Law at 314-542-2222with questions about these issues if you need help.