Strategies, Challenges, and Answers

What Is A Minor’s Compromise?

A reader of the blogs sent an email asking: “What exactly is a compromise of a minor’s claim?”  Here is my response to her.

Hi Jeanette:

Minor's Compromise in Nevada, Nevada Insurance Law, Mills & Associates Nevada Insurance and Coverage Lawyers 702-240-6060Thanks for the question.  If a Nevada minor is injured in an accident that was caused by the negligence of another, just like any adult, the minor is entitled to seek recovery from the negligent party.  Normally, children don’t know about their recovery rights in situations like this and parents will step in to try and resolve their children’s claims

Back in the day, when their children were injured, most parents would negotiate a fair settlement with the negligent party, pay the medical bills and then carefully put the remainder of that money aside so that the minor could choose to use the money how the child saw fit when the child reached 18 years old.  However, other parents weren’t as trustworthy.  Some would negotiate a quick settlement that was not in the best interests of the minor and then spend the money without taking the minor’s interests into account.

The Nevada legislature recognized this as a problem.  It created a mandatory procedure to follow when settling a minor’s claim.  You can read the details about this procedure at N.R.S. 41.200.  The procedure provides benefits for both sides of the negotiations.  It makes sure that the child’s rights are protected.  But it also gives the negligent party the protection needed to insure that the child won’t come back later making a claim for the money that the untrustworthy parent has squandered.

Under this scheme, the parent or guardian of the minor must take several important steps to finalize a settlement for the child.  Once the parties agree to the terms of the settlement, the parent or guardian of the minor must petition the court for approval of the proposed compromise.  The court will look at a number of details related to the settlement.  Those details include the facts of the accident, the nature of the injuries, the cost of the medical bills, the likelihood and costs of future care, any attorney’s fees and costs involved and many other important details.  The court will examine the petition and either approve or disapprove the proposed compromise to settle.

Once the court approves the terms of the settlement, the parent or guardian must move on to the second step, namely investing the money in a “blocked financial investment for the benefit of the minor”.  If the settlement is over $10,000, the parent or guardian must also report back to the court annually regarding the performance of the investment.  Otherwise the parent is obligated to report back only as often as the court requires.

Once the minor reaches 18 years old, he or she can take custody of the settlement money.

Jeanette, I hope that this give you a good outline regarding the method of approving minor’s compromises in Nevada courts.  If you have any other questions, please refer to the statute.

If you need a minor’s compromise handled in Nevada, please be sure to contact Mills & Associates.

About Michael Mills

Mr. Mills practices in the area of civil litigation and appeals, with particular experience in matters involving trucking liability, insurance defense, insurance coverage, premises liability, products liability and defense of personal injury. Mr. Mills is a member of the Trucking Insurance Defense Association, the Defense Research Institute Trucking Committee and the Nevada Motor Transport Association. Mr. Mills is licensed to practice before the Nevada Supreme Court and the Utah Supreme Court. He is also licensed to appear before the United States Supreme Court, the U.S. District Courts for the Districts of Nevada and Utah, as well as the U.S. Court of Appeals for the Ninth Circuit. Mr. Mills has created 3 Blogs for the benefit of the insurance industry. He serves as editor and publisher of the Nevada Insurance Law Blog, the Nevada Coverage and Bad Faith Blog and the Nevada Trucking Law Blog.

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