Were you recently involved in a car accident where your minor son or daughter was injured? Are you going after the negligent party to recover money for the damages your son or daughter sustained in the crash? If your answer to these questions is YES, there are several things you need to consider in pursuing the claim for your child.
WHAT IS THE VALUE OF MY CHILD’S DAMAGES?
The answer to this question is extremely difficult, as it depends upon many factors such as the types of injuries, the cost of the various medical procedures, whether the injuries are permanent, whether there are future medical procedures required, and the amount of pain and suffering the child has sustained from their injuries. Through the assistance of a personal injury attorney, in conjunction with the opinions of the child’s medical professions, this question can be quantified.
$24,999.99 or less: In Iowa, if the child’s claim is valued at less than $25,000.00, Iowa Code § 633.555 allows the child’s custodian to resolve the claim pursuant to the Iowa Uniform Transfers to Minors Act. This means, the parent or guardian of the child can simply sign the Settlement Release in their role as parent or guardian and resolve the child’s claim. Any settlement funds can then be put into a Custodial Bank Account for the child pursuant to the Iowa Uniform Transfers to Minors Act.
$25,000.00 or more: In Iowa, if the child’s claim is valued at $25,000.00 or more, under Iowa Code § 633.555, a Conservatorship would have to be opened to obtain Court permission to accept the settlement. The Conservatorship process, which will be addressed below, is not a simple process and doesn’t just address the settlement of the personal injury claim. Rather, it potentially requires an annual report to the Court regarding the settlement funds until the child turns 18 years old and may also require Court permission to withdraw money early for the child’s needs. This process will be further outlined below.
WHAT IS THE CONSERVATORSHIP PROCESS FOR A MINOR CHILD IN IOWA?
The general steps are outlined below:
Petition for Appointment of Conservator: A Petition for Appointment of Conservator is initially filed with the District Court in the County where the child resides. The Petition advises the Court of why the Petition is required. For example, the Conservatorship is required to pursue and resolve a personal injury claim on behalf of the minor child. The Petition further provides information on the applicant, the proposed Conservator for the child, as well as the current status of the parents and guardians of the minor child.
Attorney for Minor Child: Under Iowa Code, the minor child is entitled to representation by an attorney. Generally, the attorney who is filing the Petition for Appointment of Conservator will contact a local attorney to serve in the capacity of attorney for the minor child. Upon the filing of the Petition and request for appointment of attorney, the District Court will appoint an attorney for the minor child.
Personal Service of Petition on Child & Parents: Iowa Code requires the Petition and any accompanying documents be personally served upon the minor child (“proposed Protected Person”). If an attorney has been appointed for the minor child, service can be personally made upon the court appointed attorney. In addition to the minor child, the Petition and accompanying documents must also be served upon the parent(s) of the minor child.
Background Check Information for Proposed Conservator: Since 2020, Iowa law also requires a background check be performed by the District Court upon the proposed Conservator. This background check is meant to determine the fitness of the proposed Conservator for his/her fiduciary capacity on behalf of the minor child.
Duties of Attorney for Protected Person: Once an attorney is appointed for the minor child, the attorney has many duties owed to the minor child and the District Court. For example, the attorney must: 1) Ensure Protected Person has been properly advised of the nature and purpose of the proceeding; 2) advocate for the wishes of Protected Person; 3) ensure Protected Person has been properly advised of his/her rights in the Conservatorship proceeding; 4) personally interview Protected Person; and most importantly, 5) file a written report stating whether there is a return on file showing proper service on Protected Person, address the wishes of the minor child, and whether the minor child and/or his/her attorney consent to the appointment of the proposed Conservator.
Hearing: If the attorney for the minor child states in the report that the attorney and/or minor child are in agreement with the appointment of a Conservator and there are consents to appointment/waivers of hearing on file from the child’s parents and/or guardians, the District Court will usually enter an order granting appointment of conservator without a hearing. If a hearing is required, the burden of proof is on the Petitioner to prove to the Court that a Conservatorship is required and that the proposed Conservator is the best person suited for the role.
Bonds & Order Appointing Conservator: Under Iowa Code, a bond is generally required to be posted by the Conservator, to ultimately protect the minor child (Protected Person). To avoid any bond posting issues at this juncture, it is best to ask the Court to waive bond until the personal injury claim is submitted to the Court for approval.
Application for Authority to Settle the Personal Injury Claim: Finally, after months or even years of medical treatment and/or negotiations with the negligent party’s claim adjuster or attorney, the parties have finally reached a settlement of the minor child’s claim in excess of $25,000.00. Pursuant to Iowa Code § 633.642(5), the Conservator is required to obtain court approval for authority to settle a litigation claim by Protected Person.
“Conservator” means a person appointed by the court to have the custody and control of the property of a ward (“protected person”) under the provisions of this probate code. Iowa Code § 633.3.
WHEN AND HOW DOES MY CHILD GET THEIR SETTLEMENT?
While this application initially seems like a very cut-and-dried application, in reality, this application can be much more complicated. For example, let’s assume the minor child’s claim is being settled for $100,000.00.
Simple Application to Approve Settlement: If the Conservator just files a simple application to accept settlement and receives the $100,000.00 in cash, the Conservator will in the future: 1) have to potentially post a bond with the District Court; 2) have to file annual reports with the Court until the child turns age 18; and 3) obtain court permission to change investments of the funds or withdraw funds for the minor child’s use (prior to turning age 18). If the child is only 5 years old, there are going to be attorney fees and court costs for filing annual reports for the next thirteen (13) years, as well as yearly bond fees.
What additional options can be addressed in the Application to Approve Settlement?
Structured Settlements: Depending upon the age of the minor child and the amount of damages, a Structured Settlement (Annuity) may be a viable option as part of the litigation settlement. If the minor Protected Person’s settlement monies are placed into a Structured Settlement, which does not commence payouts until age 18 or later, as the Conservatorship does not have any assets, the Conservatorship may be terminated after approval of the settlement and funding of the Structured Settlement. Also, a structured settlement is not includable on the child’s reporting for Federal Student Aid for college.
College 529 Plans: College Plans are also a viable investment of settlement monies of the minor Protected Person and, with some Courts, having allowed the Conservatorship to be terminated after approval of the settlement and funding of the Plan, as the Conservatorship does not control any funds. The funds are all under the control of the 529 Plan. Click here for more information on College Savings Iowa 529: https://www.collegesavingsiowa.com/.
WHAT TYPE OF ATTORNEY DO I NEED?
In conclusion, the resolution of a minor child’s personal injury claim may not be a simple task, particularly if the settlement is valued at $25,000.00 or more. While personal injury attorneys are excellent in assisting in the personal injury claim of the minor child, you may also need to enlist a probate attorney to assist in the Conservatorship aspects of the minor child’s claim. The parent/guardian will also likely discuss the investment aspect of the minor child’s claim with various financial professionals to determine how to invest the minor child’s settlement funds. The parent/guardian should highly consider the benefits of a structured settlement (which is required to be part of the personal injury litigation Settlement and Release) or a College 529 Plan, as these types of investments allow for limited Conservatorship involvement after the investment of the personal injury settlement funds. This ultimately saves considerable money for the minor child in yearly attorney fees, court costs, and bond costs. Plus, it ensures growth in the minor child’s money for his/her use upon turning age 18.
Call our office for a free consultation with one of our personal injury and/or probate attorneys to discuss how to best settle your child’s personal injury claim.
WHERE CAN I FIND THE BEST ATTORNEY TO HELP ME WITH MY LEGAL MATTERS?
As always, the lawyers at Vriezelaar, Tigges, Edgington, Bottaro, Boden & Lessmann Law Firm are centered on providing exceptional legal services to the people of Siouxland and the surrounding area. The attorneys pride themselves on being first-rate advocates, ensuring their client’s rights and interests are protected and each voice is always heard. Using their knowledge, expertise, and over 240 years collective experience, they aim to deliver the best results possible for their clients.
THEY ARE SIOUX CITY LAWYERS YOU CAN DEPEND ON…
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