Ep 382 Parent Wanted to Take Settlement Money from Child

Parent Wanted to Take Settlement Money from Child https://personalinjuryprimer.com/wp-content/uploads/2025/12/Ep-382-Parent-Wanted-to-Take-Settlement-Money-from-Child.mp3 I’m David Holub, an attorney focusing on personal injury law in northwest Indiana. Welcome to Personal Injury Primer, where we break down the law into simple terms, provide legal tips, and discuss personal injury law topics. Today’s question was prompted by a caller whose young daughter broke her leg at a softball field due to someone’s negligence. I did not get additional details. The caller stated that he had settled the daughter’s case with an insurance company. However, he wanted legal advice because the insurance company demanded that all the settlement funds be placed into a guardianship for the benefit of the daughter. I’m sure every attorney receives a call like this from time to time. Invariably, a caller with a question of this nature does not want to pay for legal advice and is not receptive to being told that what he wants to do runs counter to what the law requires. The caller insisted that the money was his to spend and stated that he just needed an attorney to make the insurance company understand his situation. This particular caller stated that he had already contacted five other attorneys, and none would assist him in his desire to take his child’s settlement money. He also sounded outraged on the call and did not want to hear a word about preserving the funds for his young child. He insisted he could use the money to make car payments. He said he takes the child for rides in his car as his passenger, so she will benefit from him having a car. He said I had to be wrong to suggest that the money needs to be put in a special account and preserved for the young child. He then disconnected the call. Had he stayed on the line, we would have declined to advise the gentleman for several reasons. First, he was adamant that the money should be his. If he had hired us, we would have been obliged to protect the child’s interests. An attorney cannot represent a child against their parent or represent the parent against the child in the same legal matter where there is a conflict of interest between the two parties. Second, he was belligerent and figured he’d keep looking for an attorney who would help him take advantage of the child. 99.9% of parents of an injured young child realize that any money they might recover for that child’s injury must go to the benefit of the child and not the parent. Courts require that funds collected on behalf of the minor child must be either put in a special savings account with a federally insured institution, for the benefit of the minor child exclusively, or a guardianship has to be opened, if the net amount of the settlement is over $10,000, where the court can supervise the money and make sure that the money does not go to an unscrupulous parent. There are no exceptions. After the caller disconnected, I began to wonder if he was addicted to gambling or if someone was threatening him. There is good reason for laws that protect injured minors when it comes time to settle their injury claim. When a third party injures a child, the child has the right to sue that party. The right to sue belongs to them, not their parents. The parent was not injured. A parent may have an independent action for loss of services of a child, but the injury claim belongs to the child. Because a child is a minor, they cannot sign a written representation agreement with an attorney. The reason a child cannot sign an attorney representation agreement is the same reason the child cannot sign a contract to buy a house or buy a car. They lack the legal authority to enter into an agreement. Though the law permits a parent to sue on behalf of a minor child, any settlement reached must be approved by a court. The parent must act as a fiduciary for the child’s benefit. The court needs to approve the settlement to ensure the parent is not taking advantage of the child. I recall a case from a few years ago in which a court approved a settlement and ordered that the settlement funds for the child be deposited into a special savings account for the child. Several years after I withdrew my representation from the case (since the case was settled), the court found out that the mother had lied about setting aside the money and had instead taken all of the child’s money. Needless to say, the mother was in big trouble. I don’t think she went to jail, but I believe the court ordered her to pay back all the money, with interest. I hope you found this information helpful. If you are a victim of someone’s carelessness, substandard medical care, product defect, work injury, or another personal injury, please call (219) 736-9700 with your questions. You can also learn more about us by visiting our website at DavidHolubLaw.com – while there, make sure you request a copy of our book “Fighting for Truth.” The post Ep 382 Parent Wanted to Take Settlement Money from Child first appeared on Personal Injury Primer.