My 4 yr old was bit by a dog. It ripped her eyelid off and destroyed her tear duct. She had surgery to re-attach it and recreate her tear duct. Her medical bills totaled $11,500.
My question is: In Maryland if a minor is due an insurance settlement does it have to go into any type of legal structure or trust?
Disclaimer: Our response is not formal legal advice and does not create an attorney-client relationship. It is generic legal information based on the very limited information provided. Do not rely upon the information in our response, or anywhere else on this site, when deciding the proper course of a legal matter. Always get a personalized case review from a local attorney.
Yes. In the State of Maryland the proceeds from a personal injury settlement for a child cannot be dispersed to the parents directly – not without some restriction to their access to the money.
Maryland laws’, Title 13, Section 403 of the Estates and Trusts Article, Annotated Code states:
“If a minor or any other person in whose name a claim in tort is made or judgment in tort obtained on behalf of a minor recovers a net sum of $5,000 or more, the person responsible for the payment of the money shall make payment by check made to the order of ‘(name of trustee)’, trustee under Title 13 of the Estates and Trusts Article, Annotated Code of Maryland, for (name of minor), minor’.”
So the settlement money will be paid out in what in many states, including Maryland, is referred to as a “Structured Settlement”. This means the money will be placed in a bank account with your name as the trustee, and your daughter’s name as the owner of the account.
While your daughter is still a minor some of that money can be used to pay for her continuing medical bills, and closely related expenses, but not for anything else.
Anytime you need to access the bank account such access can be granted only with a Judge’s written permission.
No one is even suggesting you might not use your daughter’s money appropriately, but there are many unscrupulous parents who in the past have gone through all their child’s settlement money in purchases not at all related to their child’s best interests. That’s one of the reasons Maryland established Title 13.
Once your daughter turns 18 the court will begin to allow her to take parts of the money out at designated times to be used for anything she wants to buy or otherwise pay for.
Those payments will extend over a period of months or years, depending on the court’s concern to preserve the money for your daughter for as long as possible, while gaining the most interest.
The above is general information. Laws change frequently, and across jurisdictions. You should get a personalized case evaluation from a licensed attorney. Find a local attorney to give you a free case review here , or call (888) 647-2490.
Best of luck,
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