Detailed Answer: Getting Court Approval for a Minor’s Personal Injury Settlement in Wisconsin

Short answer: In Wisconsin, a settlement of a personal injury claim on behalf of a minor generally must be reviewed and approved by a circuit court judge. The court supervises the deal to protect the child’s legal and financial interests, approves attorneys’ fees, and decides how settlement money will be handled. The process protects the minor from unfair or imprudent dispositions of settlement funds.

Why the court gets involved

Minors (persons under 18) generally lack full legal capacity to accept or reject settlements. Courts step in to make sure the settlement is fair and in the child’s best interest. The judge assesses the settlement amount, the reasonableness of attorney fees, and the plan for managing the proceeds (lump sum, blocked account, structured settlement, or trust).

Typical step-by-step process in Wisconsin

1. Hire an attorney experienced with minor settlements. The attorney prepares the claim, negotiates with the insurer or defendant, and drafts the settlement agreement and supporting paperwork.
2. Prepare a petition to the circuit court. The attorney files a petition (sometimes called a petition to approve compromise or petition for approval of settlement) in the county where the minor lives or where the lawsuit is pending. The petition usually includes:
   • Names and ages of the minor and the minor’s legal guardian
   • A concise description of the accident and injuries
   • The full settlement terms and payment method
   • Itemized statement of medical bills and liens, lost wages, and other claim components
   • Proposed attorney fees and costs
   • Proposed plan for handling the net proceeds (e.g., blocked account, structured settlement, special needs trust)
3. Notice to interested parties. The court will require notice to the minor’s parents or guardians, the minor (if capacity allows), insurers, and anyone else with an interest (for example, a lienholder). This gives interested parties the chance to object.
4. Appointment of a guardian ad litem (if the court deems it necessary). A judge may appoint a guardian ad litem (GAL) to independently investigate and report whether approval is in the minor’s best interest. The GAL can interview the child, guardians, attorneys, and medical providers and submit a written report to the court.
5. Filing supporting documents and exhibits. Courts typically want the settlement agreement, medical records or summaries, bills and lien information, and any proposed orders. If medical expenses were paid by Medicaid, Medicare, or other payors, the petition should address subrogation or reimbursement issues.
6. Hearing before a judge. The court schedules a hearing. At the hearing the judge reviews the evidence, asks questions to evaluate fairness (often focusing on whether the net recovery is reasonable and whether fees are reasonable), and listens to any objections.
   • The judge may ask why the payment method chosen (lump sum vs. structured settlement vs. blocked account) is appropriate for the minor.
   • Attorney fees must be clearly explained and reasonable in light of the work done and risks taken.
7. Judge issues an order approving, modifying, or denying the settlement. If approved, the court signs an order that may:
   • Direct how funds are paid and held (for example, into a blocked account at a bank, in a trust, or to a guardian with restrictions)
   • Approve attorney fees and direct how they will be paid from the proceeds
   • Resolve liens or require the parties to resolve liens before distribution
8. Implementation of the court’s order. The settlement funds are distributed according to the order. If the court orders a blocked account, the court may retain continuing jurisdiction to approve future releases of funds for specific purposes such as education, medical care, or living expenses.
9. Follow-up or future petitions (if needed). If the funds are blocked or the settlement funds a trust, the guardian or trustee may need to seek court approval before removing principal for major expenses. The court can retain continuing oversight until the minor reaches majority or as the order specifies.

What the court looks for when deciding whether to approve a settlement

• Whether the settlement amount reasonably compensates for the injuries claimed.
• Whether attorney fees are fair and reasonable compared with the recovery and work performed.
• Whether liens (medical, Medicaid, or other subrogation claims) are accounted for or will be resolved.
• Whether the proposed method of holding and distributing funds adequately protects the minor’s long-term interests.
• Whether any conflicts of interest exist (for example, a guardian negotiating for personal gain).

Common ways the court protects the settlement funds

• Blocked (court-ordered) bank account: Funds are deposited in an account that cannot be withdrawn without court approval. Useful for smaller lump-sum awards.
• Structured settlement: Annuity payments ensure steady income over time and can reduce inappropriate early spending.
• Special needs or supplemental needs trust: Protects eligibility for public benefits while providing care-related disbursements.
• Trust managed by guardian or professional trustee: The court may order a trust with specific distribution rules.

Timing and costs

The approval process can take a few weeks to several months depending on case complexity, lien resolution, and whether the court appoints a guardian ad litem. Court filing fees, GAL fees, and attorney fees reduce the net recovery. The court must review and approve attorney fees before they are paid from the settlement proceeds.

Practical tips when negotiating a settlement for a minor

• List all medical providers and potential lienholders early so you can estimate net recovery.
• Consider structured settlement or trust options if the award is large or if the child receives public benefits.
• Expect the court to scrutinize fees; keep clear time records and a fee agreement to justify the requested fee.
• Be prepared to explain why the proposed distribution plan serves the child’s long-term interests.
• Consult a practitioner familiar with Wisconsin courts and local practice to draft the petition and proposed orders correctly.

Where to find official Wisconsin information

Wisconsin statutes and court rules may affect procedures and local practice. For official statutes and legislative text, consult the Wisconsin Legislature’s website at https://docs.legis.wisconsin.gov/statutes/. For forms and local court procedures, visit the Wisconsin Courts website at https://www.wicourts.gov.

Helpful Hints

• Hire counsel with experience in minor settlements and knowledge of Wisconsin circuit court practices.
• Document medical expenses and future care needs to justify the settlement amount and the distribution method.
• Resolve or address liens before petitioning the court to avoid delays at the approval hearing.
• Consider whether a special needs trust is needed if the minor relies on government benefits.
• Prepare a clear, itemized proposed order so the judge can readily approve the distribution and fee allocations.
• Expect the judge to ask for independent input (guardian ad litem or affidavit) if anything looks conflicted or unclear.
• Ask your attorney to provide a written timeline and budget estimate for court costs and GAL fees.

Disclaimer: This article is for general informational and educational purposes only and does not constitute legal advice. Laws and local court procedures change. For advice about a specific situation, consult a licensed Wisconsin attorney who can assess your facts and represent your interests.