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1. Who must sign and who can settle for a minor?

Parents or legal guardians routinely negotiate and sign settlement agreements for a child. However, because minors lack full legal capacity, many Tennessee courts require that the settlement be submitted to a court for approval. If there is any dispute between parents, or a potential conflict of interest (for example, a parent is a defendant or a caregiver with a claim), the court will typically require appointment of a guardian ad litem or an independent guardian to represent the child’s interests.

2. Typical step-by-step court approval process

1. Case evaluation and negotiation. The child’s attorney (or parents and counsel) negotiate with insurers/defendants to reach a proposed settlement amount.
2. Prepare a petition to the court. The attorney files a petition (sometimes called a petition to compromise a minor’s claim, petition for approval of settlement, or similar title) in the appropriate Tennessee court. The petition typically asks the court to approve the settlement, approve attorney fees/costs, and direct how the settlement funds will be handled. The petition must identify the child, parents/guardians, defendants, settlement terms, attorney fees, and any known liens.
3. Notify interested parties. The petition usually requires formal notice to all interested parties: parents, guardians, any publicly funded care programs (TennCare), and any lienholders (medical providers, health insurers, or subrogation holders). Tennessee courts expect these parties to have the chance to object.
4. Appointment of guardian ad litem (if needed). If the court believes the child needs independent representation (e.g., conflict of interest, parents disagree, or the amount is large), it may appoint a guardian ad litem (GAL) or attorney to represent the minor’s best interests. The GAL will review the settlement and advise the court.
5. Hearing on the petition. The court schedules a hearing. In many cases the judge will ask questions, confirm that the minor’s attorney has explained the settlement, confirm that liens and future needs are addressed, and determine whether the settlement is fair and in the minor’s best interests.
6. Court approval and order. If the court approves, it issues an order authorizing the settlement, approving attorney fees, and directing how funds are to be paid/disbursed (for example, into a blocked account, structured settlement annuity, or a court-supervised trust). The order may also direct payment of medical liens and how the remaining funds will be held for the minor.
7. Distribution and supervision of funds. Per the court order, funds are either placed in a restricted bank account, invested in a structured settlement/annuity, paid into a custodial account or trust, or managed under a conservatorship/guardian arrangement when the minor reaches majority or at other set times.

3. What the court looks for when deciding whether to approve

• Whether the settlement amount is fair and reasonable compared to the claim’s value.
• Whether attorney fees and costs are reasonable and properly documented.
• Whether medical liens, subrogation claims, and government benefit liens (for example, TennCare) are addressed.
• Whether the distribution plan protects the child’s long-term needs (e.g., education, medical care, lost earning capacity).
• Whether the minor has independent representation or a guardian ad litem if necessary.

4. Common ways courts protect settlement funds

• Blocked or restricted bank accounts that prevent withdrawal until the child turns 18 or until the court permits withdrawals.
• Structured settlements (annuity payments) to provide long-term income without lump-sum temptation.
• Creating a trust (including a special needs trust if the child receives public benefits) to preserve eligibility for government programs and manage funds.
• Conservatorship or guardianship oversight where a court-appointed fiduciary manages the funds.

5. Paying liens, medical bills, and government subrogation (TennCare)

Medical providers, health insurers, and TennCare often assert liens on settlement proceeds. Tennessee law and federal Medicaid rules can allow TennCare (state Medicaid) to seek repayment for services it paid. You should identify and address these claims before or during the petition so the court can approve a correct distribution. For TennCare information see the TennCare website: https://www.tn.gov/tenncare.html.

6. Which Tennessee court handles the petition?

Practice varies by county. Courts that commonly handle settlement approval petitions include probate, chancery, or circuit courts. The governing local rules and judges determine precise procedure. For statewide court information and local contacts, see the Tennessee Courts website: https://www.tncourts.gov/. For statutory law on minors and guardianship, see the Tennessee Code at the state legislature site: https://www.capitol.tn.gov/.

7. Timing and costs

Getting court approval can add weeks to months to the settlement timeline, depending on court schedules and whether there are disputes. The court-approved process commonly requires filing fees, and the court may approve payment of reasonable attorney fees from the settlement. Costs for guardian ad litem fees, trust setup, or structured settlement annuities may also apply and are typically addressed in the petition.

8. Practical examples (hypothetical)

Example A: A 10-year-old is injured in a car crash. Parents negotiate a $150,000 settlement. The attorney files a petition in chancery court, notifies TennCare and medical lienholders, and requests approval. The court approves the settlement, orders payment of medical liens, approves attorney fees, and requires remaining funds be placed in a blocked account until the child turns 18.

Example B: A child with ongoing medical needs gets a large settlement. The court appoints a guardian ad litem and approves funding a special needs trust to preserve TennCare eligibility and pay future care.

Helpful Hints

• Start early: identify liens, TennCare involvement, and potential conflicts before finalizing the settlement.
• Work with an attorney experienced in Tennessee minor-compromise procedures and special needs / trust planning when appropriate.
• Keep detailed records of medical bills, lien demands, and communications with insurers—courts expect documentation.
• Consider structured settlements or trusts when injuries cause long-term needs. Structured annuities can provide creditor protection and predictable income.
• If the child receives public benefits, consult a lawyer about special needs trusts and how settlement funds can affect eligibility.
• Expect the court to review and approve attorney fees—be prepared to justify the fee percentage compared with the work performed and Tennessee local custom.
• Contact the Tennessee Bar Association lawyer referral service to find an attorney: https://www.tba.org/.
• When in doubt, ask the court clerk which form titles and filings the local court requires for a minor-compromise petition; procedures vary by county.