What is the process and timing for a minor’s settlement when the beneficiary is under age 18?
North Carolina Minor Settlement Process and Timeline
Detailed Answer
In North Carolina, a person under 18 cannot legally release a personal-injury claim. Any settlement that puts money in a child’s hands must be reviewed and approved by the court. The governing statutes are N.C. Gen. Stat. § 1-402, Rule 17(b) of the North Carolina Rules of Civil Procedure, and the Clerk’s jurisdiction provisions in § 7A-103(1). Below is the typical path from settlement offer to the child’s receipt of funds at age 18.
Appoint a Representative. If a lawsuit is already on file, the child is represented by a guardian ad litem (GAL) appointed under Rule 17. If no lawsuit has been filed, a parent, legal guardian, or proposed GAL files a petition with the Clerk of Superior Court in the county where the minor lives.
Prepare the Settlement Petition. The petition (or motion, if suit is pending) includes:
Accident facts and injuries;
Medical bills, liens, and future care estimates;
Net settlement amount after attorney fees and costs;
Proposed disposition of the funds (bank deposit, guardianship, structured settlement, or a combination).
A supporting affidavit from the attorney must explain why the settlement is fair and reasonable.
Schedule a Hearing. The Clerk (or the Superior Court judge if the case is in litigation) sets a brief hearing—often 2–4 weeks from filing. Notice is given to the parents and any existing guardian of the estate.
Court Review and Approval. At the hearing the Clerk/judge questions the parent or GAL, reviews medical records, checks lien payoff letters, and confirms the fee agreement complies with Rule 1.5 of the North Carolina Rules of Professional Conduct. If the court finds the settlement promotes the child’s best interests, an Order Approving Minor Settlement is entered.
Funding and Safekeeping of the Money.
Net ≤ $5,000: Under long-standing North Carolina practice, the amount may be paid to a parent as the child’s “natural guardian” to hold for the child. The court can still require proof that the funds will be used only for the child.
Net > $5,000: The order typically requires one of the following:
Deposit in an interest-bearing, FDIC-insured account titled in the minor’s name and the Clerk’s name, locked until age 18;
Creation of a guardianship estate under § 35A-1220 so a qualified adult can manage and report annually to the Clerk; or
Funding a court-approved structured settlement annuity that makes tax-free payments to the child beginning at 18 (or later).
Early Withdrawals: Before age 18, money can be released only by a new court order showing the request is for the child’s health, education, maintenance, or support.
Discharge at Age 18. When the minor turns 18, the Clerk issues a release so the now-adult can withdraw the funds. Any structured-settlement payments will begin per the annuity schedule.
Typical Timeline
Settlement negotiation: Varies (days–months).
Petition drafting and filing: 1–2 weeks.
Court hearing: 2–4 weeks after filing (sooner if emergency medical bills exist).
Funding the settlement: Within 7–14 days of the order.
Money available to minor: At 18 (or as structured payments).
Therefore, once the parties agree on numbers, most North Carolina minor-settlement approvals take about 30–60 days from petition to funded order.
Helpful Hints
Collect every medical bill and lien letter early; the Clerk will not approve the settlement without them.
Structured settlements can protect government-benefit eligibility and spread payments over college years.
Keep receipts for any court-approved withdrawals; the Clerk may request an accounting.
If the Statute of Limitations worries you, remember § 1-17 tolls personal-injury claims until three years after the child’s 18th birthday—but insurers may still prefer early resolution.
Use a bank experienced with court-restricted accounts to avoid accidental withdrawals.
Ready to protect your child’s settlement? Our firm’s attorneys handle minor-settlement approvals statewide and will guide you from first offer through final court order. Call us today at 919-313-2737 for a free, no-obligation consultation.
