Detailed answer — how Oregon law treats settlement money for minors

This is an overview for parents and caregivers about whether settlement proceeds paid for a minor can be used for college, medical bills, or other needs before the child reaches adulthood. This explanation is educational only and not legal advice.

Under Oregon law, money paid on behalf of a child usually cannot be unilaterally spent by a parent as if it were ordinary household money. Courts and banks treat settlement proceeds for minors differently depending on how the money is handled after settlement:

• Minor’s funds held in a protected account or “blocked” by the court: If a settlement is paid into a court-supervised account or a bank account that is blocked because the recipient is a minor, the court must usually approve any early disbursement. Oregon’s guardianship and conservatorship framework governs who may control a child’s money and how a court authorizes use. See ORS Chapter 126 on guardians and conservators: https://www.oregonlegislature.gov/bills_laws/ors/ors126.html.
• Money placed in a custodial/UTMA-type account: Many settlements are structured as a transfer to a custodian under the Uniform Transfers to Minors Act (UTMA) or similar rules. A custodial account lets the custodian spend funds for the minor’s benefit (education, medical costs, etc.) before the minor reaches the statutory termination age. The custodian still has a fiduciary duty to use the funds for the child’s benefit and must follow the state rules that govern custodial accounts.
• Structured settlements and annuities: The parties sometimes arrange structured payments (periodic payments) rather than a lump sum. Those payments can be directed to pay medical expenses, educational costs, or living support over time without needing repeated court approval (depending on how the structured settlement is drafted).
• Conservatorship or guardian of the estate: If a minor’s settlement is substantial, a court may require or a parent may petition to be appointed conservator (guardian of the estate). A conservator has legal authority to manage and spend the child’s money, but must get court permission for certain large expenditures and must file accountings. Petitioning for conservatorship is done in probate court under the guardianship/conservatorship statutes cited above (ORS Chapter 126).

Typical path to get funds for college or medical care before age 18

1. Review the settlement paperwork and bank documents to learn whether the funds are already in a custodial account, blocked account, or paid directly to a parent.
2. If funds are blocked or the settlement requires court approval, file a petition in the probate or juvenile court that approved the settlement asking the judge to authorize the requested payments (for college tuition, medical bills, etc.).
3. Submit supporting documents: the settlement agreement, itemized estimate/receipt for the educational or medical expense, a proposed budget showing how the draw will benefit the child, and any proposed protective measures (for example, having funds paid directly to the school or medical provider rather than to the parent).
4. The court will notify interested parties, hold a hearing if required, and decide whether the proposed use is in the child’s best interest. The judge can approve full or partial payment, approve ongoing draws, or deny the request.

What the court considers

Judges typically look at whether the requested withdrawal directly benefits the minor (education, medical care, therapy, adaptive equipment) and whether the request is reasonable and well-documented. The court balances current needs against preserving funds for the child’s long-term welfare.

Hypothetical example

Imagine a 16-year-old receives a $100,000 settlement after an accident. The settlement is placed into a court-blocked account. The parent asks the court for $25,000 to pay for college enrollment and required medical equipment. The parent files a petition with the court, attaches tuition invoices, equipment estimates, and a proposed payment plan. At the hearing, the judge may authorize payment directly to the university and equipment vendor if the judge concludes the disbursements serve the child’s best interest.

Key Oregon resources

Start by reading the state guardianship and conservatorship law (ORS Chapter 126): ORS Chapter 126. If a custodial account or UTMA transfer is an option, check with your bank about account types and talk with an attorney about what the state statute requires for custodial transfers and the statutory termination age.

Disclaimer: This is general information about Oregon law and not legal advice. I am not a lawyer. For case-specific guidance, consult a licensed Oregon attorney who handles minor settlements, guardianships, or conservatorships.

Helpful Hints — practical steps and tips

• Document early: keep the settlement agreement, release, bank statements, and any medical or tuition invoices organized for the court.
• Talk to the paying insurer or defendant’s counsel about where the check will be made payable — ask whether it will be placed in a blocked account, custodial account, or paid to a parent. That choice affects your next steps.
• Consider a custodial (UTMA) account if the payer and your bank support it. Custodial accounts often allow the custodian to spend for the child’s benefit without repeated court petitions, but they come with fiduciary duties and state-specified termination rules.
• If the settlement is large, weigh the costs and benefits of a conservatorship. Conservatorship adds court oversight and costs, but it provides clear legal authority to manage and spend the child’s funds.
• For college costs, ask the court to pay tuition directly to the school where possible. Courts are more comfortable approving direct payments to providers than handing a large sum to a parent.
• Use a detailed proposed budget when petitioning the court: itemize tuition, fees, housing, medical devices, therapy, and show how the money will be used.
• Keep receipts and be ready to file accountings if you are a custodian or conservator. Courts expect transparency about how the child’s money was spent.
• Get legal help. A lawyer experienced with minor settlement approvals or conservatorships will save time and reduce the risk of a denied petition or later disputes.