If a child is involved in a car accident does the money they receive go into a trust until they are 18?

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If a child is involved in a car accident does the money they receive go into a trust until they are 18?

Asked on April 4, 2009 under Accident Law, Oregon

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

Courts usually order that the net proceeds paid to a minor from an accident settlement be held for the benefit of the minor until the minor is an adult at age 18.

That said, courts also are generally very practical. They permit (and usually order) that the cost of the child's medical and hospital care (not paid for by other insurance) be paid from the settlement. They require lawyer fees to be paid from the settlement. They may permit certain reimbursement to caregivers or extraordinary expenses paid for by the parents.

If the child is likely to sustain any extra-ordinary items of cost, beyond what a family normally does or can provide, or will require them before she is 18, the court often authorizes such expenses from the settlement proceeds or the trust or other account set up to hold them, sometimes in advance and sometimes afterwards.

However, if the child receives a large settlement and the past bills and future bills are not an issue, the courts want to protect the proceeds for the child until she is 18, and keep others who want to get their hands on the money (sometimes the teenager who wants a new sports car or the parents who may want to ease their financial responsibility) from touching it.  

If there is a special use for the money that the court accepts as primarily for the child's benefit -- such tuition to a private school the parents would not have been able to afford -- the judge may authorize that expenditure.

If you're thinking about something specific, ideally it is really something you should discuss with your attorney before the settlement terms are finalized and the account or trust is set up.


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