Detailed answer — how Montana law treats settlement money for minors

When a minor in Montana receives settlement money (for example, from a personal injury claim), who controls the money and whether it can be spent for college or medical expenses before the child turns 18 depends on how the money was handled at the time of settlement. Several common paths affect access:

• Custodial accounts (UTMA/UGMA style): If the payer places the money in a custodial account for the minor (a custodial transfer under state law), the custodian must use the funds for the minor’s benefit. Typical permitted uses include health, education, maintenance, and support. The custodian owes a fiduciary duty to the child and must spend money only for the child’s benefit until the child reaches the age of majority or the statutory age set by the law under which the custodial account was created.
• Trusts (including education or spending trusts): If the settlement is placed into a trust for the child, the trust document controls when and how money can be distributed. A trust can allow distributions for college or medical costs before age 18, limit distributions to specific purposes, or delay distributions until a later age. Trustees must follow the trust terms and Montana trust/estate law.
• Blocked or court-approved settlement accounts: Many settlements on behalf of minors are approved by a court and placed in a blocked account or under the supervision of the court (or placed with a conservator/guardian of the estate). When funds are under court supervision or blocked, the parent or guardian typically cannot withdraw arbitrary amounts. To access funds early, the parent or guardian usually must petition the probate/court that approved the settlement and demonstrate that the distribution is in the child’s best interest (for example, for necessary medical care or to pay tuition).
• Conservatorship / guardianship of the estate: If a conservator (sometimes called a guardian of the estate) has been appointed, that person manages the minor’s assets. Conservators may have authority to pay for education or medical expenses, but their powers depend on the court order authorizing the conservatorship and Montana statutes governing fiduciary duties. If the conservator lacks authority to make a requested payment, they can petition the court to approve it.
• Structured settlements: If the settlement pays periodic payments, accessing lump sums early is generally governed by the terms of the structured settlement and federal/state rules about commutation or sale of future payments. A court may need to approve any commutation or modification.

Key takeaway: there is no single automatic right for a parent to spend a child’s settlement money for college or medical bills before the child reaches majority. Access depends on the vehicle used to hold the settlement (custodial account, trust, blocked account, conservatorship, or structured settlement) and any court orders or trust terms that apply.

Montana statutory framework and court oversight

Matters involving a minor’s settlement, a conservator, or a guardian are governed by Montana’s probate/guardianship and property laws. The Montana Code Annotated (MCA) contains the statutory rules governing guardianships, conservatorships, trusts, and transfers for minors. For an overview of the Montana Code Annotated, see the Montana Legislature’s code site: https://leg.mt.gov/bills/mca/. Courts often review and approve settlements for minors and can authorize early disbursements when justified.

Common paths to get money for college or medical bills before age 18

1. If funds are in a custodial account: The custodian should confirm the account’s permitted uses. Often the custodian can pay for the child’s education and medical needs directly because these are clearly for the child’s benefit.
2. If funds are in a trust: Review the trust document. If the trust expressly allows education or medical distributions, the trustee can make payments. If not, the trustee may petition the court to approve a distribution for those needs.
3. If the settlement was court-approved / funds are blocked: File a petition with the court that approved the settlement (often the probate court or district court) asking for an early release for a specific purpose (tuition, medical care). Provide invoices, admissions from the school or provider, a proposed budget, and a statement showing why early withdrawal is in the child’s best interest.
4. If a conservator manages the funds: Ask the conservator to request court approval for the specific expenditures if the conservator lacks express authority.
5. If the child receives public benefits: For minors on Medicaid, SSI, or other means-tested benefits, consider a special needs trust (SNT) so necessary funds for supplemental expenses won’t jeopardize benefits. Trusts for disabled beneficiaries should be drafted carefully to preserve eligibility.

Practical example (hypothetical)

Hypothetical: A 15-year-old received a $100,000 settlement after a bicycle accident. The settlement was approved by a Montana court and placed in a blocked probate account to be released at age 18. The parents want to use $20,000 on the teen’s college deposit and $5,000 on ongoing therapy now.

Steps the parents would usually take in Montana:

• Review the court order approving the settlement to see what control the court reserved.
• Ask the court clerk what paperwork is required to request an early distribution.
• File a petition with the court asking for a specific release for education and medical expenses, and attach supporting documentation (school invoices, therapy bills, a budget, and an explanation of why this benefits the minor).
• Attend the hearing; the judge will weigh the child’s best interest, current needs, and protection of remaining funds.

Because courts weigh the child’s interests, they commonly grant reasonable requests for necessary medical care and tuition deposits but will protect a lump sum that could be squandered or not in the child’s long-term interest.

Costs, timing, and what courts consider

Petitioning a court takes time (weeks to months) and may involve attorney fees and court costs. Courts consider:

• Whether the requested distribution is necessary for the child’s health, support, or education;
• Whether the distribution is a reasonable amount compared with the total settlement;
• Whether a less-intrusive alternative (partial payment, payment directly to a provider or school) is available;
• Protecting remaining funds for future needs.

Tax, financial aid, and benefit impacts

Before using settlement money for college, consider:

• Financial aid implications — custodial assets and some trusts may count against eligibility. Schools and FAFSA treat custodial assets differently than third-party trusts.
• Tax issues — some settlement money may be taxable depending on the nature of the award; settlement allocations (physical injury vs. lost wages) matter for tax purposes.
• Public benefits — distributions may affect Medicaid or SSI eligibility; a properly drafted special needs trust can help preserve benefits.

Consult a Montana attorney and, if needed, a CPA experienced with settlements and financial aid to evaluate tax and aid consequences.

Where to get local help in Montana

For guidance and representation consider:

• Hiring a Montana attorney experienced in probate, guardianship, or trusts.
• Contacting Montana Legal Services or community legal resources for low-cost help: https://www.mtlsa.org/.
• Contacting the probate court where the settlement was approved for procedural guidance.
• Asking a financial planner or CPA about tax and financial-aid effects.

Quick links and references

• Montana Code Annotated (MCA) — Montana Legislature code site: https://leg.mt.gov/bills/mca/
• Montana courts (general information and local court contacts): https://courts.mt.gov/
• Montana Legal Services Association: https://www.mtlsa.org/

Bottom line: You may be able to access some of a minor’s settlement money before age 18 in Montana for college or medical expenses, but whether you can depends on how the money is held and any court or trust restrictions. If funds are under a court order, in trust, or in a structured settlement, you will likely need court approval or to follow the trust terms. If funds are in a custodial account intended for the child’s benefit, permitted uses often include education and medical costs.

Disclaimer: This article is for general informational purposes only and is not legal advice. It does not create an attorney-client relationship. For advice about a specific situation, consult a licensed Montana attorney who handles guardianship, probate, or trust matters.

Helpful Hints

• Locate any court orders, the settlement agreement, trust documents, or account paperwork first — these control what you can do.
• If funds are court-supervised, ask the court clerk what form and evidence the judge requires for an emergency or early distribution.
• Gather documentation showing the need: school invoice, medical bills, provider statements, and a proposed budget for the requested amount.
• Consider asking the court for payment directly to the school or medical provider rather than giving cash to a parent.
• If the minor receives public benefits, talk to an attorney about a special needs trust before spending proceeds that could disqualify benefits.
• Keep careful records and receipts for any distributions; conservators and custodians are accountable to the child and the court.
• Talk with a CPA or financial aid adviser to understand tax consequences and how distributions affect college aid.
• When in doubt, get a short attorney consultation — a qualified Montana lawyer can often tell you whether a petition is likely to succeed before you file.