Detailed Answer

If a child in Tennessee receives a settlement (for example, for a personal-injury claim or another legal claim), parents or guardians often ask whether they can use part of that money for the child’s college or medical expenses before the child turns 18. The short answer: sometimes — but how depends on how the settlement is structured and whether a court must approve the use of funds.

Common ways settlement money is handled for a minor

• Court-approved settlement with funds blocked or supervised. Many Tennessee courts require that settlements for minors be approved by the probate or juvenile court (or the court handling the underlying case). As part of approval, the court can order that funds be held in a “blocked” or supervised account and permit limited withdrawals for the minor’s support, education, or medical needs.
• Custodianships (Uniform Transfers to Minors Act — UTMA). Settlement funds can be transferred to a custodian under Tennessee’s UTMA. A custodian may use custodial property for the minor’s benefit before the minor reaches the age of termination set by the transfer (UTMA governs how custodians can manage property for minors). See Tennessee Code Title 35 (UTMA provisions), Tenn. Code Ann. §§ 35-15-101 et seq.: https://www.capitol.tn.gov/legislation/titles/35.html
• Trusts (including education trusts) or structured settlements. The settlement can fund a trust or structured settlement that pays out for specified expenses (tuition, health care) or periodic payments. Trusts allow tighter control and limited distributions for education or medical care before age 18.
• Guardianship/conservatorship. In some cases the court appoints a guardian or conservator to manage the minor’s money. The guardian must follow the court’s orders and Tennessee rules for fiduciaries (see Tennessee Code Title 34 for guardianships/conservatorships): https://www.capitol.tn.gov/legislation/titles/34.html

How courts usually decide whether to permit early access

Courts focus on the child’s best interests. If the parent or guardian asks the court to release money for college or medical costs before the child reaches majority, the court typically requires:

• Specific, documented need (invoices, bills, school admissions, treatment plans).
• A plan showing how remaining funds will be preserved for the child’s future needs.
• Evidence the payout is reasonable and in the child’s best interest.

Practical examples

Example A — Court-blocked account: A 16‑year‑old receives a $60,000 settlement. The court approves the settlement and orders the funds held in a blocked account. The parent petitions the court for a $10,000 release to pay for a required medical procedure. The court reviews medical records and may authorize the payment directly to the provider or to the parent.

Example B — UTMA custodian: A parent becomes custodian under UTMA for a $30,000 cash transfer. The custodian may use custodial funds for the minor’s benefit (including health and education) but must keep records and act for the child’s benefit. The UTMA account will end at the age set by the transfer instrument or statutory default, at which point the minor receives the balance.

Steps to take if you want to use part of the settlement now

1. Read the settlement documents carefully — they may already specify how funds must be held or disbursed.
2. If the settlement has not yet been approved by the court, discuss with your attorney asking the court to approve limited disbursements for college or medical bills.
3. If funds are already placed in a UTMA account, review the custodial agreement to determine what the custodian can pay for now and what requires court permission.
4. If funds are in a blocked account or trust, petition the court or trustee with documentation (invoices, admissions, treatment plans) requesting a release for the necessary expense.
5. Keep detailed records of all disbursements and file required accountings with the court or trustee.

Key Tennessee law references

• UTMA (Uniform Transfers to Minors Act) provisions in Tennessee Code — see Title 35: https://www.capitol.tn.gov/legislation/titles/35.html (Tenn. Code Ann. §§ 35-15-101 et seq.).
• Guardianship and fiduciary authority — see Tennessee Code Title 34: https://www.capitol.tn.gov/legislation/titles/34.html
• Court procedures for approving minor settlements and disbursements typically occur in probate or civil court; local practice varies, so check the local court’s procedures or speak to a local attorney.

Bottom line

You may be able to access some of a minor’s settlement funds in Tennessee to pay for college or medical expenses, but the path depends on how the settlement funds are held (blocked account, UTMA custodian, trust, or structured settlement) and on court approval or trustee rules. Courts and fiduciaries prioritize the child’s best interests and will require documentation and safeguards to preserve the child’s future funds.

Helpful Hints

• Keep copies of all settlement papers, court orders, trust documents, and receipts.
• Before spending anything, confirm whether the account is blocked, custodial, or a trust — each has different rules about withdrawals.
• For medical expenses, provide the court or trustee with the provider’s invoice and a statement showing the expense is necessary for the child’s care.
• For college, provide acceptance letters, billing statements, and a written plan showing how tuition fits within the child’s overall financial plan.
• Ask the court for direct payment to the provider (school or hospital) rather than payment to a parent when possible — courts prefer clear use of funds.
• Consider long-term protections: a trust can limit early access and protect funds for education; a structured settlement can provide periodic payments rather than a lump sum.
• Talk with a Tennessee attorney experienced in minor settlements or probate to prepare petitions, required accountings, and to represent the child’s best interests in court.
• Be aware of tax and financial aid implications before moving large sums; consult a tax or financial advisor in addition to a lawyer.

Reminder: This article provides general information about Tennessee procedures and options. It is not legal advice. To understand how the law applies to a specific settlement or child, contact a licensed Tennessee attorney.