Helping Minors With Settlements In PI Cases
Perhaps one of the more confusing and mind-numbing aspects of representing minor clients is determining whether their settlement must be approved, and if so, what is the process to do so (as well as the limitations of net proceed allocation). This issue is governed by a conglomerate of Florida Statutes, Florida caselaw, and Florida Probate Rules, making it all the more frustrating. Add in the local jurisdictional rules and requirements of specific circuit courts, and you have a mixture sure to made anyone’s head spin. If you do not follow the rules and requirements, your settlement can be voided by a court!
This being said, becoming familiar with the statutes, rules, case law, and local requirements is a must if you want to efficiently and quickly obtain the justice that your clients so rightfully deserve. Knowing this information, or obtaining the assistance from co-counsel that does, is essential, but equally essential is setting the proper expectations with your client (and/or their parents) as to how the court will permit the funds to be allocated and/or used.
The Basics: When do I need to seek approval of a settlement benefitting a client who is under 18 years old (who is not legally emancipated or married)?
If a case is in litigation or in-suit: ALWAYS
If the case is in a Pre-suit State – It Depends. The key number to focus on here is $15,000.00, and it matters for both the gross and net. Let’s start with the Gross:
Gross: When the gross is $15,000.00 or less, and you have a natural guardian(s) under the definition of a natural guardian pursuant to Florida Statute § 744.301, that natural guardian(s) can settle the case without court approval.
When the gross amount of your case’s settlements (in the aggregate for the incident, including parties other than the minor) exceeds $15,000.00, court approval is required.
Net: When the net amount of your settlement is $15,000.00 or less, the Court has the discretion to allow the natural guardians (if they exist pursuant to Florida Statute § 744.301) to manage the net proceeds on behalf of the minor child without further court oversight. Note, some jurisdictions do not allow for management in this scenario. It is important to know your local court’s precedent and procedures when advising clients. If a court does allow for the management of these assets under this scenario without court oversight, it is important to advise the client on the limitations of the use of the assets according to Florida law regardless of the lack of court oversight.
When the net amount of the settlement exceeds $15,000.00, decisions now must be made as to the allocation of the proceeds. There are options, many of which are impacted by local rules and judicial preference. Those options include, but are not limited to: structuring the settlement such that the minor child does not receive funds until after reaching the age of 18 (this often avoids the need of a guardianship of the property of the minor, but it appears that a minority of jurisdictions require guardianship in this situation); placing the funds in a restricted depository until the child reaches the age of 18 to avoid guardianship (some jurisdictions still require guardianship in this situation); or establishing a guardianship of the property where the funds are placed in a restricted account and are only accessible by court order.
Anytime a guardianship is required or optioned, the guardian will be required to be represented by an attorney until the child reaches 18, at which time the guardianship is closed, or the court otherwise closes the guardianship due to the exhaustion of guardianship assets.
If you have questions or inquiries, call today to speak with one of our attorneys about your specific case needs! 904-901-4809.
For information about Matthew H. Hinson, Esq.’s CLE entitled “Probate for the Personal Injury Practitioner” see the link below or contact Mr. Hinson at The Hinson Law Firm, P.A..
Mr. Hinson has presented on this topic in a CLE to various plaintiff’s attorney organizations. Read more about it by clicking on the following link: Continuing Legal Education Class – Probate for the Personal Injury Practitioner.