Detailed Answer
This guide explains the typical court process in Vermont for getting a personal injury settlement on behalf of a minor approved and made safe for the child. It uses plain language and hypothetical examples so you can follow the steps even if you have no legal background. This is educational only and not legal advice.
1) Why court approval is usually required
When a person under 18 (a minor) receives money for injuries, Vermont courts normally must approve the settlement or compromise. The court protects the minor’s financial interests because a minor cannot fully enter enforceable contracts or manage large sums of money. Court approval ensures the amount is fair and that funds will be managed or restricted for the child’s benefit.
2) Who participates in the approval process
- Minor: the person who suffered the injury.
- Parent(s) or legal guardian: often the ones who sign settlement documents on the child’s behalf.
- Guardian ad litem or attorney for the minor: the court may appoint a neutral guardian ad litem or require that the minor have independent counsel to represent the child’s interests in the approval hearing.
- Claimant’s attorney and opposing party/insurer: they submit the proposed settlement documents.
- The Probate Court or Civil Division of Superior Court (depending on the case and local practice): the judge who reviews and approves the compromise.
3) Typical step-by-step process in Vermont
- Negotiate and sign a settlement agreement. The parties reach a dollar amount and sign settlement papers. Do not distribute or spend funds until the court approves them if the settlement is for a minor.
- Decide who will petition the court. Usually the parent, guardian, or the minor’s attorney files a petition asking the court to approve the settlement (sometimes called a petition to compromise or approve a minor’s claim).
- Prepare the petition and supporting documents. Typical filings include:
- The petition or motion stating the settlement terms and why approval is in the child’s best interest;
- A copy of the settlement agreement and proposed release;
- An itemized statement of medical expenses, liens, and other obligations the settlement will pay;
- Evidence of how attorney fees and costs will be paid (attorney fee agreement);
- A proposed order for how the money will be handled (e.g., restricted account, structured settlement, or appointment of a guardian of the estate).
- Court review and possible appointment of a guardian ad litem or counsel. The court may appoint a guardian ad litem or require separate counsel to investigate whether the settlement is fair, especially when the amount is substantial or disputes exist. That person will file a report or recommendation for the judge.
- Hearing or ex parte review. Some minor-approval petitions require a hearing where the judge asks questions about the fairness of the deal and the proposed management of funds. Other petitions can be resolved on the papers alone. If a hearing occurs, the judge may ask the minor’s representative and counsel to explain the settlement’s reasonableness.
- Judge issues an order approving (or denying/modifying) the settlement. The order may approve the net payment to the minor, the method of payment (lump sum vs. structured), the creation of a restricted account, the appointment of a guardian of the estate, and approval of attorney fees. If the court denies approval, the parties may need to renegotiate or present more information.
- Implementation of the court’s order. After approval, defendant/insurer issues payment per the court’s order. Funds may be deposited into a restricted bank account, a blocked account under court control, a custodial account (e.g., UTMA/UGMA where permitted), or a structured settlement annuity. The court or guardian usually must account for how funds are spent for the child’s benefit.
- Ongoing supervision and accounting (if ordered). The court may require periodic accountings (reports of receipts and expenses) if a guardian of the estate manages the money. The frequency and duration depend on the judge’s order and the amount of money involved.
4) Common issues the court focuses on
- Is the settlement amount fair given the injury, future needs, and liability exposure?
- Are attorney fees reasonable and properly documented?
- Will liens (medical, Medicaid, Medicare, or private liens) be paid or resolved?
- How will the money be protected for the minor’s benefit (restricted account, guardian, or structured settlement)?
- Will the distribution affect public benefits (Medicaid, SSI) and have safeguards?
5) Hypothetical example
Jane, age 9, is injured in a car crash. Her parents negotiate a $150,000 settlement with the insurer. Jane’s attorney drafts a petition asking the Probate Division to approve the settlement, showing $30,000 in past medical bills, proposed attorney fees of $45,000 (30%), and a proposed order that $50,000 be placed in a blocked bank account until Jane turns 18 while the remainder pays current bills and a structured annuity is purchased for future care. The court appoints a guardian ad litem, holds a hearing, questions the fee percentage and plan to protect Jane’s benefits, then approves the settlement after reducing fees and ordering a portion placed in a restricted account. The insurer pays according to the order and the court monitors the funds.
6) Timing and costs
Timing varies. If the parties file a complete petition and the court accepts it without a hearing, approval may take a few weeks. If a hearing, guardian ad litem appointment, or contested issues occur, approval can take months. Expect filing fees, possible guardian ad litem fees, and court costs. Attorney fees may come from the settlement but must be approved by the court.
7) Where to find Vermont-specific resources
- Vermont Judiciary — Probate Division (information and forms): https://www.vermontjudiciary.org/courts/probate
- Vermont Judiciary — Probate forms (common petitions and instructions): https://www.vermontjudiciary.org/forms/probate-forms
- Vermont statutes and legislative site (look up guardianship, probate, and minor-compromise provisions): https://legislature.vermont.gov/statutes
Helpful Hints
- Hire a personal injury attorney experienced with minors’ settlements in Vermont. They can draft the petition, propose appropriate protections, and present the case to the court.
- Do not cash or accept settlement checks for a minor until the court signs an approval order. Early spending can create complications and may violate court requirements.
- Gather documentation: medical records, bills, proof of future care needs, and any liens. The court wants a clear accounting of past and expected costs.
- Consider structured settlements or blocked accounts to protect funds and preserve eligibility for public benefits. Discuss tax and public-benefit consequences with counsel.
- Expect the court to scrutinize attorney fees. Be prepared to explain and justify the fee percentage and cost deductions.
- If the minor receives government benefits (Medicaid, SSI), notify the appropriate agencies and propose a plan to preserve those benefits (special needs trust or other protections may be required).
- Keep copies of all filings and court orders. The court may require accountings; timely record-keeping makes that easier.
- If parties disagree about the settlement’s fairness, a guardian ad litem or independent counsel can protect the minor’s interests and make the approval process smoother.
Final practical notes
Each case is unique. The court’s main role is to protect the minor and to make sure the settlement is fair and that funds are preserved for the child’s benefit. Work with counsel who knows Vermont practice so petitions are prepared and presented correctly to minimize delay and risk to the minor’s recovery.
Disclaimer: This article provides general information about Vermont law and court practice for educational purposes only. It is not legal advice. For advice about a specific situation, consult a licensed Vermont attorney who practices in personal injury and probate/guardianship matters.