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How Injury Settlements For Children Are Different in VT

How Injury Settlements For Children Are Different in VT

teddy-bear-with-accident-injury

By Steven A. Bredice, Esq., Board Certified Civil Trial Specialist

It’s every parent’s worst nightmare, and we hope it never happens to you.

When your child is involved in a serious accident, it is a terrifying and heart wrenching experience for everyone involved.

In situations where the injury was caused by someone else’s negligence, the parents or guardians might seek legal action, but it’s important to note that personal injury cases involving minors are different from others. First and foremost, a child’s injuries require careful monitoring over time to ensure there are no long-term effects that could lead to permanent impairment. If no warning signs are found, a legal claim arising from an injury to a child has unique characteristics according to Vermont law.

The Statute of Limitations Is Longer

One of these unique features is the temporary suspension, or “tolling” of the Statute of Limitations. In most personal injury cases, the accident victim has a three-year time limit to bring a lawsuit for personal injuries in Vermont, but when the injury is to a minor, the statute does not begin to run until the child reaches age 18.

After turning 18, he or she has three more years to bring suit, regardless of how much time has passed since the injury. Suit may be filed before the age of 18 as well.

A Guardian Must Manage A Child’s Personal Injury Claim

Another difference is that an adult, usually a parent, must act on the child’s behalf in relation to a lawsuit.

The adult becomes the “nominal” plaintiff in the court case, entrusted to make legal decisions, with the advice of counsel, in the child’s best interests. The adult is usually referred to as the child’s “next best friend” in formal legal proceedings, including court documents and other papers.

Court Approval And Oversight Is Required When A Case Is Settled

A third unique feature involves court approval of any minor’s settlement. Sometimes the court will also require ongoing oversight of any money recovered.

For recoveries of $1,500 or less, a Vermont Superior Court Judge must approve the settlement in proceedings brought by a specially appointed guardian on the child’s behalf. This guardian, usually one or both of the child’s parents, is appointed by petition to the probate court in the county where the child lives. After the judge approves the settlement, the guardian can manage the settlement funds, acting in the child’s best interests.

When the accident victim gets a settlement greater than $1,500, the Probate Court requires the guardian to hold the funds in trust and periodically report to the court until the victim turns 18 years old.

The Court must approve any expenditures from the recovery fund, and it typically only allows expenses related to medical treatment, medical equipment, education or some other need. Probate Judges frown on the use of these funds for parental financial obligations, such as gifts, trips or household expenses.

Protecting And Growing Settlement Money

The last unique aspect is the use of “structured settlements.” A structured settlement involves depositing the money in trust for the child with a pre-determined schedule of payouts at some future date. It is essentially an annuity, funded by an initial payment to a financial institution which invests the money and makes sum-certain payments on an agreed upon timeline.

When interests rates are good, a structure can grow a settlement significantly, especially if it is created when the child is very young and the payouts are termed appropriately. For example, many parents and courts favor deferring payment to an age greater than 18, in order to protect young people from making financial mistakes due to lack of judgment and experience.

Structured settlements combine the goals of providing the child money at the “age of majority”—often for educational purposes—while also preserving some or most of the funds for later in life. This is accomplished by paying a certain amount when the accident victim turns 18, and scheduling additional payments in the future, like when he or she turns 25, 30 and 35.

When a young child wins a significant recovery and uses a structure to help it grow, the total paid out in the future can be much greater than the original settlement. A structure will preserve and grow the recovery funds even when interest rates aren’t great, as long as enough time passes between the injury and the distribution of money. When it comes to minors with injury claims, the old adage “time is on your side” is definitely true.

Steven A. Bredice

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