Lawsuit Funding for Cases involving a Minor

If you have happened upon this article there is a good chance you are asking yourself, “Why is it so hard to find Lawsuit Funding for my Child?” The real problem here is why it is so difficult to find lawsuit funding for any minor. Unfortunately, depending which state you are in, a contract is customarily not enforceable between one individual who is a minor and one who is a consenting adult/and or legal business. And, in some states contracts are not only not enforceable but actually void when such an arrangement is made. That said, no insurance carrier is inclined to honor such an arrangement and as such no funding company is likely to agree to an advance that involves a minor.


If you and your child were involved in the same accident and are now involved in the same lawsuit yo may be eligible for an advance on the portion of the case involving injury or damages to you. Even if this is the case, you will likely have to have your attorney state in writing that you are entitled to significant damages as a result of the injuries to your child. That said, there are plenty of lawsuit funding companies, law firms and insurance companies that do not want to get involved into such an agreement if a minor is involved at all.

What happens to the Minor’s Settlement?

If and when your child’s lawsuit reaches settlement the court system will most likely take into account the child’s long term financial stability. How does one do this? There are plenty of ways but most likely the attorneys and courts involved will structure the financial windfall into periodic payments like an annuity or structured settlement.

Most of these cases involve an an auto accident or some other serious injury to the child but also include medical malpractice, product liability claims and even workplace accidents involving a parent that has either perished or caused severe injuries. Periodic Payments are reoccurring future payments based off of the necessity for long-term needs like food, clothing, shelter, medical care, and educational expenses. Essentially an annuity from an insurance company, a structured settlement is often recommended because the minor has little to no say in how payments are set up and parents are required to spend the money in the exact manner the court orders.

Benefits of a Structured Settlement for Minors

  • settlement income is tax-free
  • settlement does not require maintenance fees
  • rate of return is fixed
  • highly regulated industry
  • annuity is protected from creditors and judgments
  • until child becomes 18, the money remains protected

Designing a Structured Settlement for Minors

Federal and state laws assign courts the responsibility of how much the settlement should be and how the awarded funds can be spent.  Whey do courts decide? Well there are plenty of reasons. One being so that the child receives the money and not an irresponsible family member. A structured settlement will ensure that the money is not spent all at once, will grow over time, and will last over time. If set up properly, the structured settlement can be designed to help pay for college, a down payment on a home or a car, and even cover for regular cost of living adjustments.