Michael Pines | October 5, 2026 | Child Personal Injury \ Personal Injury
When a child is injured because of someone else’s negligence, a personal injury settlement can provide important compensation for medical expenses, pain and suffering, future care, and other losses.
But if the injured person is under 18, the settlement process works differently than it does for an adult.
In California, a parent generally cannot simply accept a settlement check on behalf of a child and deposit the money into a personal bank account. Instead, settlements involving minors typically require court approval through a process commonly known as a Minor’s Compromise. The court also determines how the child’s settlement proceeds will be protected.
Depending on the circumstances, the money may be placed in a blocked bank account, used to fund an annuity or structured settlement, transferred to an approved trust or custodian, or protected through another arrangement authorized by California law.
The goal is straightforward: the settlement belongs to the child, and California law provides safeguards designed to preserve that money for the child’s benefit.
Quick Insights
- A child’s personal injury settlement generally requires court approval in California.
- The court reviews both the settlement and what will happen to the child’s money.
- Parents generally cannot deposit their child’s settlement into their own bank account or spend it as they choose.
- A common option is a blocked, insured bank account that cannot be accessed without court authorization.
- Settlement proceeds may also be placed into an annuity, structured settlement, trust, special needs trust, guardianship estate, or other court-approved arrangement.
- Money in a blocked account generally becomes accessible when the child reaches adulthood, although procedures may be required to obtain the funds.
- A court can sometimes authorize withdrawals before age 18 when the money is needed for the child’s benefit.
- California law provides limited exceptions for relatively small settlements, so the appropriate arrangement depends on the specific case.
Why Does a Child’s Settlement Need Court Approval?
Adults generally have the legal authority to decide whether to accept a personal injury settlement.
Children do not.
Under California Probate Code § 3500, a parent may have authority to compromise a minor’s disputed claim when the child does not have a guardian of the estate, but the compromise is valid only after court approval. The settlement proceeds must then be handled according to California’s rules governing money recovered for minors.
California Rule of Court 7.950 generally requires the petitioner to submit detailed information allowing the judge to evaluate the reasonableness of the proposed settlement. The standard petition is made using Form MC-350, although certain qualifying settlements may use an expedited procedure.
In San Diego County, the Superior Court explains that the Minor’s Compromise process allows the court to oversee both the settlement itself and the disposition and disbursement of the settlement funds.
In practical terms, the court is looking out for the child’s interests before the case can be permanently resolved.
What Does the Judge Review in a Minor’s Compromise?
A judge does more than simply sign off on the settlement amount.
The petition generally provides information about the child’s injuries, treatment, medical expenses, settlement, attorney’s fees and costs, liens or reimbursement claims, and the proposed disposition of the remaining money.
San Diego Superior Court specifically requires supporting information concerning the reasonableness of the compromise, which can include medical records and bills, information concerning liens, documentation of costs, and information regarding the proposed bank account, annuity, or trust.
The court can therefore evaluate important questions such as:
- Is the overall settlement reasonable?
- What injuries did the child suffer?
- What is the child’s current medical condition and prognosis?
- Are there outstanding medical bills or liens?
- What attorney’s fees and litigation expenses will be deducted?
- How much will the child actually receive?
- Where will the net settlement proceeds be placed?
- Is the proposed arrangement in the child’s interests?
California courts also review attorney’s fees paid from a minor’s recovery under a reasonableness standard.
So, Where Does a Child’s Settlement Money Actually Go?
There isn’t one answer that applies to every case.
California Probate Code § 3611 provides several potential methods for protecting a minor’s settlement proceeds. Depending on the amount of the settlement, the child’s needs, the child’s age, and the court’s determination, the money may be placed in one or more protected arrangements.
Some of the most common options include the following.
1. A Blocked Bank Account
A blocked account is one of the most straightforward ways to protect a child’s settlement.
The settlement proceeds are deposited into an insured account at a financial institution. Once the court imposes the restriction, money cannot simply be withdrawn by a parent or guardian.
California Rule of Court 7.953 requires the financial institution to acknowledge receipt of the court’s order and the deposited funds. The bank must recognize the restrictions imposed on the account.
This means the child’s parent generally cannot use the account as an ordinary savings account.
The money is protected for the minor.
2. An Annuity or Structured Settlement
A court may also approve an arrangement in which some or all of the settlement proceeds are used to purchase an annuity.
California Probate Code § 3611 specifically allows the court to direct settlement proceeds into a single-premium deferred annuity subject to court restrictions.
Structured arrangements can provide payments over time instead of releasing the entire settlement as one lump sum.
For example, an approved structure might provide for:
- Payments beginning at age 18
- Periodic payments for college or early adulthood
- Larger payments at later ages
- A combination of monthly payments and lump-sum distributions
This can be particularly useful when a child receives a substantial settlement.
In San Diego, when an annuity is proposed as part of a Minor’s Compromise, the Superior Court requires information identifying the annuity company and payment schedule and documentation concerning the company’s rating.
Importantly, this means that not every child’s entire settlement necessarily becomes available in one lump sum on the 18th birthday. If the court approves an annuity or other structure providing later payments, distributions can follow that approved schedule.
3. A Special Needs Trust
If a seriously injured child has disabilities and receives or may become eligible for certain means-tested public benefits, simply placing a large settlement into the child’s name can create additional concerns.
In appropriate cases, the court can approve the use of a special needs trust.
California Probate Code § 3611 allows settlement money to be paid into a special needs trust established under Probate Code § 3604.
These arrangements can be particularly important when a child’s injuries result in significant lifelong care needs.
Because special needs trusts involve additional legal and financial rules, families should carefully evaluate how a proposed settlement could interact with government benefits and long-term planning before the settlement is finalized.
4. A Court-Approved Trust
California law also allows the court to approve other trusts for a minor’s settlement proceeds.
Under Probate Code § 3611, settlement money may be delivered to the trustee of a trust created or approved by the court, subject to conditions intended to protect the minor’s interests.
Trust arrangements may be considered in larger or more complicated cases where a simple blocked bank account does not adequately address the child’s circumstances.
5. A Guardian of the Estate
Another possibility is the appointment of a guardian of the child’s estate.
The court can order the remaining settlement money or property to be delivered to the appointed guardian of the estate, who then has legal responsibilities concerning management of those assets.
This arrangement can involve additional court supervision and financial responsibilities.
6. A Custodial Arrangement
California law also permits certain settlement proceeds to be transferred to a custodian for the minor under the California Uniform Transfers to Minors Act.
Again, the appropriate option depends on the settlement and the court’s determination.
Does the Settlement Money Go to the Parents?
Usually, not in the way people commonly imagine.
The fact that a parent negotiated a claim, hired the attorney, attended medical appointments, or served as the child’s representative does not mean the child’s net personal injury recovery becomes the parent’s property.
The settlement compensates the child for the child’s legal claim.
California’s Minor’s Compromise process is designed in part to ensure that the child’s recovery remains protected.
There is, however, an important statutory exception to the general rule. Probate Code § 3611 allows a court, when the remaining balance does not exceed $5,000, to order some or all of the money or property delivered to a parent under specified statutory conditions. California law also gives courts additional discretion concerning settlements with remaining balances of $20,000 or less.
So while it is useful to say that parents generally cannot simply take possession of a child’s personal injury settlement, the precise method of handling the funds depends on the court’s order and the circumstances of the case.
Can Parents Use Their Child’s Settlement Money Before Age 18?
Not simply because they are the child’s parents.
If settlement proceeds have been deposited into a court-restricted blocked account, withdrawals generally require court authorization.
California Rule of Court 7.954 requires a petition seeking withdrawal to identify the account, disclose prior withdrawals and the current balance, and explain why the requested withdrawal is justified. The court may rule on the request or hold a hearing.
San Diego Superior Court similarly provides procedures for requesting partial withdrawal of funds held in blocked accounts.
This is important because a child’s personal injury settlement is not intended to become a general family bank account.
If an extraordinary expense arises that genuinely benefits the child, however, the court can evaluate whether use of settlement money is appropriate.
What Happens to a Blocked Account When the Child Turns 18?
For a traditional blocked account, turning 18 is generally the major milestone because the child is no longer a minor.
California Rule of Court 7.953 allows the original deposit order to direct the financial institution to permit withdrawal by the former minor after the date the child reaches majority without requiring an additional court order.
The particular court order and account documents matter, however.
San Diego Superior Court specifically provides procedures for withdrawing money from a blocked account upon reaching the age of majority.
At that point, the money belongs to the now-adult child.
Again, an annuity or structured settlement may work differently. If the court-approved settlement provides for payments at ages 18, 21, 25, 30, or another schedule, those payments generally follow the terms of the approved structure rather than automatically becoming one unrestricted lump sum at age 18.
Why Would a Settlement Be Structured Instead of Put in a Bank Account?
There can be advantages and disadvantages to each approach.
A blocked bank account is relatively simple. The money remains protected, potentially earning interest, until it can be released according to the court’s order.
A structured settlement can spread compensation over a longer period.
For a very young child receiving a significant recovery, parents and attorneys may be concerned about turning over a substantial lump sum immediately when the child turns 18. A structure might instead provide money at various stages of young adulthood.
For example, payments might help with:
- College or vocational training
- Transportation
- Housing
- Ongoing medical needs
- Future financial security
The best arrangement depends on the amount recovered, the child’s age, the nature of the injuries, anticipated future needs, available financial products, and other circumstances.
Once an annuity or structured settlement is established, changing the payment arrangement can also be difficult. That makes careful planning before court approval especially important.
What Happens to Medical Bills and Attorney’s Fees?
The gross settlement and the amount ultimately protected for the child are not necessarily the same number.
Before the child’s net recovery is deposited or structured, the Minor’s Compromise may address authorized deductions such as:
- Medical liens
- Health insurance reimbursement claims
- Case expenses
- Court-approved attorney’s fees
San Diego Superior Court requires documentation concerning medical liens, Medi-Cal or Medicare reimbursement claims when applicable, litigation costs, and requested attorney’s fees as part of the Minor’s Compromise process.
The judge therefore has an opportunity to review how the settlement is being divided before approving the compromise.
What If the Child Has Significant Future Medical Needs?
Cases involving catastrophic childhood injuries require particular care.
A child who suffers a traumatic brain injury, spinal cord injury, severe burns, amputation, permanent orthopedic damage, or another life-changing condition may need medical treatment and assistance for decades.
In these cases, resolving the personal injury claim is about much more than determining today’s medical bills.
Attorneys may need to evaluate:
- Future surgeries
- Physical or occupational therapy
- Assistive technology
- Mobility equipment
- Home modifications
- Future attendant care
- Educational accommodations
- Lost future earning capacity
- Life-care planning
- Government benefit eligibility
- Appropriate trusts or structured settlements
Once a personal injury claim is settled and released, families generally cannot return later simply because the child’s future expenses turn out to be greater than anticipated.
That makes careful evaluation of the child’s long-term needs especially important before asking the court to approve a settlement.
Who Represents the Child During the Settlement Process?
Because a child generally cannot conduct litigation independently, an adult representative is typically involved.
Depending on the circumstances, this may include a parent acting as guardian ad litem or another appropriate representative.
The representative’s role is to protect the child’s interests—not to obtain control of the child’s settlement.
California law also requires disclosure of information concerning attorneys involved in the claim and their fee arrangements so the court can evaluate potential conflicts and the proposed deductions from the child’s recovery.
For a standard Minor’s Compromise hearing, California’s rules generally require both the petitioner and minor claimant to attend unless the court excuses their appearance for good cause.
How Long Does a Minor’s Compromise Take in San Diego?
The precise timeline depends on the type of petition and circumstances of the case.
San Diego Superior Court states that petitions qualifying for the expedited procedure under California Rule of Court 7.950.5 proceed under that rule. Other Minor’s Compromise petitions are generally scheduled for a hearing within 30 days of filing.
California’s expedited procedure is available only when specific conditions are satisfied. Among those requirements, the petitioner must be represented by a California attorney, the claim cannot be for wrongful death, no portion of the net proceeds may be going into a trust, and there cannot be unresolved lien disputes. The rule also includes limitations based on the settlement amount and other circumstances.
Additional time may be necessary to address medical liens, prepare supporting documentation, establish the required account or financial structure, or comply with other court requirements.
Why California Protects Children’s Personal Injury Settlements
The rules surrounding a Minor’s Compromise can initially feel complicated.
But there is an important reason for them.
A six-year-old who suffers a serious injury cannot meaningfully decide whether a $100,000 settlement adequately compensates them for injuries that could affect their health for decades. Nor can a young child make decisions about how a substantial recovery should be invested or spent.
Court supervision provides another layer of protection.
The judge can examine the settlement, question whether deductions are reasonable, and make sure the remaining funds are placed somewhere designed to preserve them for the injured child.
Talk to a San Diego Personal Injury Lawyer About Your Child’s Injury Claim
When your child has been seriously injured, obtaining a settlement is only part of the process.
Families also need to determine whether the proposed settlement fairly accounts for the child’s injuries and future needs, properly resolve medical liens and expenses, obtain court approval, and establish an appropriate way to protect the child’s recovery.
At Pines Salomon Personal Injury Lawyers, our San Diego child accident personal injury attorneys can investigate your child’s accident, pursue compensation from the responsible parties, negotiate with insurance companies, and guide your family through the California Minor’s Compromise process when a settlement is reached.
If your child was injured because of someone else’s negligence in San Diego or elsewhere in Southern California, contact Pines Salomon Personal Injury Lawyers today for a free consultation.
Protecting your child’s recovery today can help ensure that the compensation remains available when they need it in the future.
We proudly serve San Diego, San Diego County, and its surrounding areas:
Pines Salomon Injury Lawyers – San Diego Office
835 5th Avenue #302, San Diego, CA 92101
(858) 551-2090
Available 24/7
Pines Salomon Injury Lawyers – La Jolla Office
4660 La Jolla Village Dr. San Diego, CA 92122
(858) 585-9031
Available 24/7
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