Settlements for Minors

Often, a child is injured in a motor vehicle collision. When this happens, a mother or father may seek recovery of damages on behalf of the child, or minor. When and if a settlement on behalf of a minor is reached, the money that is delivered on the child's behalf, often to the mom or dad, is considered to be the property of the injured child.

The way that child's money is spent is limited by South Carolina statute. Failure to comply with the South Carolina statute could expose the parent to a claim by the child for misappropriation of the funds. If the settlement is large enough to be under the management of a Probate Court, improper spending of the child's settlement fund could result in sanctions by the court.

Section 62-5-103 of the South Carolina Probate Law explains in detail the obligation of the parent to preserve their child's money, and has some details about what the money cannot be spent upon. (These same rules apply to incapacitated persons.) It states, in part, as follows:

Money or other property received on behalf of a minor or incapacitated person may not be used by a person to discharge a legal or customary obligation of support that may exist between that person and the minor or incapacitated person. Excess sums must be preserved for future benefit of the minor or incapacitated person, and a balance not used and property received for the minor or incapacitated person must be turned over to the minor when he attains majority or to the incapacitated person when he is no longer incapacitated. Persons who pay or deliver in accordance with provisions of this section are not responsible for the proper application of it.

Therefore, the child's settlement money cannot be used to help pay for such things as rent, groceries, clothing, medical expenses, or similar routine expenses even if the child would indirectly or directly benefit from these expendures. This Rule exists because those type of expenses are already the usual and customary obligations that go along with a person's parental duties.

As stated in the statute, absent unusual circumstances, any excess money that is not spent on legitmate expenditures should be given to the child when he or she becomes 18 years old.