Can a parent access part of a child’s settlement for college or medical costs before age 18?

Short answer: In Maryland, parents cannot simply spend or withdraw a settlement paid to a minor. Most settlements for a minor require court approval or must be held in a custodial or protected account until the child reaches the age of majority or until a court authorizes earlier access for specific needs such as education or medical care.

Detailed answer — how Maryland handles minor settlements

This answer explains the common legal pathways and practical steps under Maryland law. It is intended to educate and is not legal advice.

Why you usually can’t use the money right away

• When a minor receives a settlement (for example, from a personal-injury claim), the settlement often resolves claims for future damages and future lost earning capacity. Courts are protective of minor beneficiaries and typically must approve any settlement that affects a minor’s long-term interests.
• If the settlement is paid directly to a minor or names the minor as the payee, the funds are generally placed in a protected account or handled under procedures designed to preserve the minor’s property until the minor reaches the legal age to control it.

Common ways Maryland deals with minor settlement proceeds

• Court-approved minor-compromise or approval hearing. A parent or guardian (usually through a lawyer) files a petition asking the court to approve the settlement. The court evaluates whether the settlement is fair and in the minor’s best interest. If approved, the court may authorize how the funds will be held or distributed.
• Blocked or restricted bank accounts. Courts may order funds placed into a blocked account that cannot be withdrawn without a court order. This protects the child’s assets while permitting limited, court-authorized withdrawals (for example, for medical bills or school expenses).
• Custodial accounts (UGMA/UTMA equivalents). Money can sometimes be placed in a custodial account where a custodian manages funds for the minor until statutory termination age. Maryland has statutory mechanisms for transfers to minors and custodial arrangements; these control when the minor gains access.
• Structured settlements / annuities. Settlements can be structured to pay periodic amounts (monthly, yearly) or lump sums at future dates (for college milestones), which protects assets while providing predictable funding for future needs.
• Special needs or education trusts. If the child is disabled or has special circumstances, a court-approved special needs trust or an education/trust arrangement can hold funds and allow distributions for permitted purposes without jeopardizing public benefits.

When a court may allow early access

Maryland courts can permit early use of settlement funds for necessary expenses if the petition shows that spending is for the minor’s benefit and that the proposed use is reasonable. Typical examples the court may approve:

• Current and anticipated medical treatment that the settlement was intended to cover.
• Reasonable college or vocational-education costs (tuition, mandatory fees, required supplies), particularly if the court believes early distribution serves the minor’s best interest.
• Reimbursement of out-of-pocket medical expenses related to the claim.

However, courts will generally require detailed documentation and may limit how much of the settlement can be used now versus reserved for the child’s future.

What you’ll likely need to do in Maryland

1. Talk to an attorney experienced in Maryland minor-settlement practice. They will prepare and file the required petition or motion and explain local court practices.
2. Collect documentation. Typical documents include the settlement agreement, medical bills and estimates, school cost estimates, the minor’s birth certificate, and any insurance or benefit statements.
3. File a petition for court approval or guardianship of property. The petition explains why an early distribution is needed and proposes a plan for how the remaining funds will be managed and protected.
4. Propose a safe management plan. Courts favor options that limit parental control over the whole sum: blocked accounts, trustee-managed trust, structured settlement, or custodial account with clear termination rules.
5. Attend a hearing. The court may require a hearing to review the petition and may appoint a guardian ad litem or other representative to protect the minor’s interests.

Practical examples (hypothetical)

Example A — Medical expenses: A 12-year-old settled a personal-injury claim with payment intended to cover future surgeries. The parent petitions the court to approve using part of the settlement to pay current surgery costs and to place the balance in a blocked account. The court approves reasonable medical payments now and orders the remainder placed in a restricted account until the minor turns 18 or another court order is entered.

Example B — College costs: A 16-year-old receives a settlement and the family wants help paying for college at 18. The parent asks the court to allow a portion now to pay down accrued educational expenses and to hold the rest in a structured arrangement that will provide lump sums at 18 and later years. The court may approve this if it finds the plan reasonable and protective of the minor’s future.

Key Maryland resources

• Maryland Courts (information on guardianship and legal processes): https://www.mdcourts.gov/legalhelp/guardianship
• Maryland General Assembly (browse state statutes and legislative information): https://mgaleg.maryland.gov

Note: Specific statute sections and local court rules may apply to minor settlements, guardianship of property, and transfers to minors. Your attorney can point to the exact statutory provisions and local rules that control your case.

Helpful Hints

• Do not spend settlement checks meant for the child. Even a well-intended withdrawal can lead to legal problems if the funds are intended for the child’s future.
• Consult an attorney early. Minor-settlement procedures involve petitions, notices, and often hearings; an experienced attorney can prepare the strongest case for needed early access.
• Gather proof of need. Collect medical bills, treatment plans, and school cost estimates to support a petition for early distribution.
• Consider trust options. A court-approved trust or structured settlement can give controlled access for education or healthcare while preserving the child’s long-term interests.
• Keep careful records. Track all expenditures and court orders to show funds were used for the child’s benefit.
• Think about public benefits. If the child receives Medicaid or other public benefits, consult an attorney about special needs trusts so distributions do not jeopardize eligibility.
• Ask about alternatives. Sometimes insurance, payment plans, or charitable programs can cover immediate costs while keeping the settlement intact for the child’s future.

Next steps

If you are facing this situation, contact a Maryland attorney who handles minor settlements or guardianship of property. They can evaluate your facts, propose the safest way to get funds for college or medical expenses, and file the necessary petition with the court.

Disclaimer: This article is educational only and is not legal advice. For guidance specific to your situation, consult a licensed Maryland attorney.