In North Carolina, a minor cannot legally finalize a personal-injury settlement without court oversight. The court appoints a guardian ad litem (GAL) to investigate the settlement, protect the child’s interests, and recommend approval or changes to the judge. A parent can often serve as GAL if there’s no conflict of interest, but courts commonly require an independent GAL when the parent also has a related claim (for example, for the child’s medical bills) or potential fault is at issue. After approval, remaining funds are typically restricted—either deposited with the clerk of court or managed under a guardianship of the estate—until the child turns 18.
North Carolina treats minors as legally unable to settle their own claims. A judge will appoint a guardian ad litem in the injury case to act solely for the child, review the proposed settlement, evaluate risks and benefits, check medical liens and fees, and report to the court whether the compromise is fair and in the child’s best interest. If the court approves, it will order how the money is to be safeguarded. For smaller net recoveries, the court may direct a deposit with the clerk of court; for larger recoveries, the court often requires appointment of a guardian of the estate to manage the funds. Access to the child’s money before age 18 is tightly limited and usually requires a court order showing genuine need and that parents cannot provide those necessities.
When a GAL is used: In a minor’s personal-injury case, the court uses a GAL to ensure the settlement is fair to the child. The GAL is separate from the child’s lawyer and provides an independent assessment to the court.
Who can serve as GAL: Any competent adult may serve. Parents frequently serve when no conflict exists. A conflict typically exists if the parent has (or wants to waive) a separate claim for the child’s medical expenses, if allegations touch on parental negligence, or if there are disagreements among caregivers. In those situations, courts regularly appoint a neutral GAL.
GAL duties: Review liability and damages, consider litigation risks, confirm the reasonableness of attorney’s fees and costs, address medical liens and subrogation, and assess whether any structured settlement or restricted account is appropriate. The GAL then reports and recommends to the court.
Protecting the child’s funds: Net proceeds are usually restricted. If the amount meets statutory limits, the court may direct deposit with the clerk; otherwise, the court may require a guardian of the estate to manage funds with fiduciary duties and court oversight.
Limited access before 18: Withdrawals before the child’s 18th birthday typically require a court order showing the parents cannot provide necessities and that the expense is for the child’s exclusive benefit. Documentation and receipts are required.
Start the approval process: Your attorney files a civil action or a motion/petition to approve a minor’s settlement. The court appoints a GAL (parent or independent) to represent the child’s interests for settlement purposes.
GAL investigation: The GAL reviews the police/incident report, medical records, bills, proposed attorney’s fees and costs, liens (e.g., hospital or Medicaid), and the settlement terms (including any structured payments). The GAL speaks with the family and counsel and prepares a recommendation.
Court hearing: The judge reviews the GAL’s report, hears from counsel, and confirms the settlement is fair and reasonable. The court also reviews fees, liens, and the plan for safeguarding the funds.
Safeguarding funds: The order will direct how to secure the child’s net proceeds. Common options include deposit with the clerk of superior court (often used for smaller amounts within statutory limits) or the appointment of a guardian of the estate for larger sums. The order may set out whether any portion will be structured or placed in a restricted account.
Disbursements before majority: If funds are with the clerk, a parent/guardian may request a disbursement for necessities the parents cannot afford (e.g., medical items, schooling). The clerk typically requires receipts and will pay providers directly when possible.
Release at age 18: Unless a different lawful arrangement applies, funds held for the child are released to the child at age 18.
G.S. 1A-1, Rule 17: Requires minors in civil cases to appear through a representative such as a guardian ad litem. Courts use this to appoint a GAL to evaluate and recommend on a proposed settlement.
G.S. 7A-111: Allows the clerk to receive and administer certain minor funds (including personal injury settlements) up to specific dollar limits and governs when and how disbursements can be made for the child’s necessities.
G.S. 7A-112: Governs how the clerk invests funds held for minors, ensuring principal protection and compliance with court and statutory requirements.
G.S. 35A-1252: Describes the powers of a guardian of the estate for a minor, which is often required when larger settlements must be managed under fiduciary duties and court supervision.
G.S. 44-49 and G.S. 44-50: Establish health care provider liens on personal-injury recoveries. Courts and GALs account for these liens when recommending and approving distributions.
Parent as GAL conflicts: If a parent has a separate claim for the child’s medical expenses or if parental fault is disputed, the court may find a conflict and appoint an independent GAL. Expect this in many contested or complex cases.
Using the child’s money for general family expenses: Court-held funds are for the child’s exclusive benefit. Disbursements usually require proof that parents cannot provide necessities and documentation of the expense. Paying providers directly is preferred.
Skipping court approval: Settlements without proper court approval and GAL involvement can be set aside and may not bind the child. Always seek court approval.
Ignoring liens: Failing to address hospital or public-benefit liens can delay approval and distribution. The court will expect lien issues to be resolved or appropriately allocated.
Accessing funds without orders: Do not move or spend funds outside the court’s directives. Withdrawals without court authorization can result in sanctions and repayment obligations.
Missing the right vehicle for safeguarding funds: Larger recoveries often require a guardian of the estate; smaller ones may go to the clerk. The court will tailor the order—follow it carefully.
If you wish to serve as GAL, be ready to explain why no conflict exists and that you can put the child’s interests first.
Gather key documents early: medical records and bills, insurance explanations of benefits, lien notices, and a settlement breakdown showing fees and costs.
Ask your attorney about structured settlements or restricted accounts if the recovery is sizable; they can help protect funds until age 18 and beyond.
For court-held funds, keep receipts and request payments directly to providers when possible; that speeds approval.
Procedures differ by county and case type. Confirm local requirements for hearing scheduling, GAL reports, and deposit instructions.
If you’re resolving a child’s injury claim and need guidance on court approval, GAL appointment, and how to safeguard the funds, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at 919-313-2737.
Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney–client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.
