The child is 14 and going to receive approximately $7,000 from a settlement after expenses and attorney's fees. As the parent, do I need to have the money placed in a restricted account or can I just get the money?
The courts are very jealous of the rights of minors as it concerns such matters, and Arkansas law provides that any settlement of a minor's claim in the amount of $5,000 or more must go through probate and be placed in an interest-bearing trust account as directed by the court. The money in this account may be used only for the benefit of the child, and may not be used to defray the ordinary expenses of raising a child that is expected of all parents (rent, food, clothing, etc.); the court may place other restrictions on access to or use of the money. When the child turns 18, the money goes to the child free of any restriction. The insurer is usually responsible for drafting and filing the documents and securing the necessary notifications; there will almost certainly be a hearing followed by an Order of the court directing you to do what you need to do. Good luck!
You need to speak with your attorney directly to see what the local rules/procedures are regarding minor settlements since most states and counties have diffferent rules. The money is your child’s and not yours, and courts generally go out of their way to make sure the parents keep their hands off the settlement money. This is usually done by placing the money into a restricted account until the child turns 18.
I am not licensed in Arkansas, but I can tell you that in Wisconsin most judges require a copy of the Court’s order be placed on file with the institution where the restricted account is located. Also, the only way a parent can get any money out of the account early (medical expenses, etc…) is to go back to court and ask the judge to release the money. Even under these circumstances the judge could still say no.
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