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When a Child is Awarded a Personal Injury Settlement, Which Divorced Parent Will Manage the Money?

In some cases where a child sustains a severe injury in an accident, he or she may collect financial damages in a personal injury lawsuit. The parents are typically given control of this money, often until the child reaches a certain age or becomes fit to manage the money. It can complicate matters if the parents are divorced or legally separated.

In general, it is typically the parent who was awarded custody of the child who becomes responsible for managing any money the child receives in a settlement. In cases where parents share joint custody, the parent with primary custody may receive the money. However, there are cases where the court might choose to award the money to the non-primary custodial parent. It’s important to keep in mind that the money belongs to the child and the parent is merely acting on behalf of the child. The court is responsible for making a decision that protects the best interests of the child.

Personal Injury Awards for Children

In most cases, a large personal injury settlement given to a child will be awarded in two parts. The first installment may cover essential and immediate financial losses, such as medical bills and legal expenses. The second installment may provide compensation for future medical expenses and for intangible pain and suffering that could affect the child for years to come. The second installment is typically placed into a trust fund for the child, which the parents cannot access or may only access with the court’s permission. When the child reaches 18 years of age, the money would become his or her personal property and would be directly accessible.

Fiduciary Duty

The child’s parents have a fiduciary duty toward their child in the event of a personal injury settlement, and this applies whether or not the parents are married. Courts may place restrictions on how much access a parent has to their child’s settlement money. This is to protect the best interests of the child.

If you would like more information about how parental rights might affect a child’s personal injury claim, don’t hesitate to reach out to a family lawyer Arizona for legal counsel.

Hildebrand LawThanks to our friends and contributors from Hildebrand Law for their insight into personal injury awards and divorce agreements.

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Steve Harrelson
Steve Harrelson
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