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Securing Settlement Funds – Advice from a Le Mesa Personal Injury Attorney

Being involved in a collision or incident can be traumatic for a child. From nursing your injuries, to dealing with possible anxiety caused by the incident, children are not as equipped as adults to deal with outside stressors. Compensating the child is one solution the courts have used to ease the burden, however, once the minor’s compromise has been approved and the settlement papers have been finalized, an account is required to hold the settlement funds.

The parents or legal guardian of the children have multiple accounts they may choose to hold the settlement funds. Most accounts are set up to protect the money from any ill-intentioned persons and garner interest over a period of time. While every account is meant to protect the settlement funds, you should weigh the pros and cons of each account before choosing one.

A blocked account used in connection with a minor’s personal injury settlement is a bank account approved by a court. It does not allow access to funds until the minor turns eighteen-years-old or a court order to release the funds is granted. Blocked accounts are a great solution for protecting settlement funds from being touched before the child turns eighteen. However, blocked accounts can create barriers when the minor turns eighteen, as the account has to be unblocked. Additionally, if there is an emergency and the minor would like to access the funds early, the family would have to petition the court to withdraw funds. Blocked accounts also do not have the best interest rates, a point of contention for some, as one of the goals of protecting the funds from abuse is to help it grow as it sits idly in an account.

Another account to consider is a structured settlement. Structured settlements are tax-advantaged and do “not require maintenance fees.[i]” Structured settlements can be accessed before a minor reaches the age of eighteen, however, only to meet the minor’s needs. These needs are laid out during the creation of the structured settlement, thus, if you do not anticipate all of your child’s needs you may not gain access to the money, as the account is protected until your child turns eighteen.

There are numerous accounts you should consider before selecting one. You can set up a trust in your child’s name or create a 529 plan. A trust offers more flexibility than other accounts and requires a conservator to manage it, while a 529 plan is a “tax-advantaged[ii]” account created by the IRS that is meant solely for educational purposes. However, if the 529 plan is used for anything other than educational purposes a “penalty” may be applied. The courts normally do not release money from a settlement to the parents or legal guardians of a child because the money is seen as solely the child’s, so, when choosing an account for your child, make sure the account fits your child’s long-term needs. Selecting an account at random may bear a heavy burden further down the line.

Securing a strong financial future by choosing an account for your child is important, but the research in choosing the right account can be tedious. If you have any questions regarding depositing money into a blocked account or a structured settlement, the attorneys at Acclaim Law Group will help address your questions. Call (858) 252-0781 to set up a free consultation.

Disclaimer: While we always seek to establish accuracy when publishing articles, this piece is not intended to provide legal advice and should not be used as such. Each individual case will differ and should be discussed with an attorney or legal expert. If you would like to inquire about pursuing a claim, please contact a personal injury lawyer San Diego at (858) 252-0781 or email

[i] Ritchie, A. (n.d.). Structured Settlement for Minors . Retrieved from

[ii] Cooper, M. B. (2017). A Minor Compromise. Retrieved from

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