Getting Court Approval for a Minor’s Personal Injury Settlement in Michigan: FAQ

Short answer: In Michigan, most personal injury settlements for minors require court approval to protect the child’s legal and financial interests. You typically must file a petition or motion, provide evidence of the claim and proposed settlement, allow the court to review attorney fees and liens, and have the court order how the funds will be held or distributed. This article explains the common steps, documents, and choices you will encounter.

Disclaimer

This is general information only and not legal advice. I am not a lawyer. For advice about a specific case, consult a licensed Michigan attorney experienced with minor-compromise petitions and probate/civil procedure.

Why court approval is usually required

Courts require approval to protect minors from unfair settlements, excessive attorney fees, or improper handling of settlement funds. Michigan’s court rules include procedures for settling claims involving minors; see Michigan Court Rule 2.201 for guidance on compromise of claims for minors and incapacitated persons: MCR 2.201 (Part 2, Michigan Court Rules).

Typical step-by-step process under Michigan practice

1. Retain a lawyer experienced with minor settlements. Hire an attorney who has handled minor-compromise petitions or probate matters. Many defense carriers require counsel for the plaintiff’s side, and courts will closely scrutinize fee arrangements.
2. Decide where to obtain approval. If a lawsuit is already filed, you usually ask the same civil court to approve the settlement (by motion or supplemental filing). If no lawsuit is pending, you or the child’s guardian can file a petition with the probate court in the county where the minor lives to approve the compromise.
3. Prepare the petition or motion for court approval. The filing typically includes:
   • A copy of the settlement agreement or memorandum of terms.
   • A proposed order for the judge to sign.
   • An explanation of the claim, injuries, treatment, and prognosis.
   • A statement of the settlement amount and how you propose to divide it (attorney fees, medical liens, costs, taxes, and the net amount for the minor).
   • Evidence of the minor’s age and identity (birth certificate) and the parent/guardian’s relationship.
4. Provide documentation for liens, medical bills, and benefits. The court must know whether Medicaid, Medicare, health insurers, medical providers, or other entities have liens or subrogation claims. Provide estimates or letters showing outstanding bills and how they will be paid.
5. Explain and justify attorney fees and costs. Michigan courts review whether requested attorney fees are reasonable for the work done. Submit fee agreements, time records, and a justification for contingency fees or hourly billing so the judge can evaluate them.
6. Address representation for the minor (guardian ad litem or independent counsel) if required. The court may appoint or require a guardian ad litem (GAL) or independent attorney to represent the minor’s best interests. In some cases, the minor’s own counsel will file a report or recommendation supporting the settlement.
7. Attend the hearing. The court usually schedules a short hearing where the judge asks questions about the fairness and reasonableness of the settlement and distributions. Parents, the minor (depending on age), counsel, and any guardian ad litem should be ready to attend.
8. Court issues an order approving (or modifying) the settlement. If the judge finds the settlement fair and in the minor’s best interest, the judge signs an order approving the compromise and directing how funds will be paid out or held. If not satisfied, the court may deny approval or require changes.
9. Follow the court’s directions for handling proceeds. The judge may order that funds be:
   • Placed in a blocked/bonded account until the minor reaches maturity,
   • Paid into a custodial account under the state’s Uniform Transfers/Uniform Gifts to Minors Act,
   • Used to purchase a structured settlement or annuity, or
   • Placed under a conservatorship or guardianship (if appropriate and required).

   Comply with the exact ordering language to avoid later disputes.

10. Close out liens, pay fees, and distribute or deposit funds as ordered. After the judge signs the order, pay authorized attorney fees, lien obligations, and other authorized expenses. Then deposit or distribute the remaining funds as the order directs.

Documents and evidence you will usually need

• Settlement agreement or term sheet
• Petition or motion for approval and proposed order
• Medical records and billing statements
• Evidence of liens and payoff statements (Medicaid/Medicare letters if applicable)
• Attorney fee agreement and itemized billing or contingency agreement
• Minor’s birth certificate and ID for guardianship verification
• Proof of service or notice to interested parties (parents, insurers, lienholders)

How courts evaluate whether to approve a minor settlement

Judges look for whether the settlement is fair and reasonable in light of the minor’s injuries, future needs, and potential damages. Courts consider:

• The extent and permanence of injuries and expected future medical needs
• The certainty of recovery at trial vs. the guaranteed settlement amount
• Whether attorney fees are reasonable and customary
• Whether liens and creditors are fairly handled
• How the proceeds will be protected for the child’s future use

Common ways the court will protect settlement funds

• Blocked bank account requiring a judge’s signature to withdraw funds
• Custodial account under Michigan’s minor transfer laws (custodian manages funds for the minor until a specified age)
• Structured settlement annuity that pays the minor over time
• Conservatorship or guardianship over the minor’s property when long-term oversight is necessary

Timing and cost considerations

Court approval adds time and filing costs. Typical steps (filing, serving notices, scheduling hearing) often add several weeks to a few months, depending on the court’s calendar. Expect filing fees, possible publishing or notice costs, and the judge’s time. The attorney’s fee is usually agreed to in a contingency contract but must be approved by the court.

Helpful hints

• Hire counsel experienced with minor-compromise petitions and Michigan probate practice. They handle paperwork, notice to lienholders, and the hearing.
• Collect medical records early and obtain lien payoff figures before filing the petition.
• Propose practical means of protecting funds — blocked accounts and annuities are commonly acceptable to judges.
• Prepare a clear, itemized breakdown of how the settlement will be divided (fees, liens, costs, net to minor).
• Expect the court to closely scrutinize contingency fees; justify them with time records or market comparables when necessary.
• If public benefits (e.g., Medicaid) were used, contact the appropriate agency early to determine potential reimbursement obligations and obtain written payoff or conditional-payoff statements if possible.
• Bring the minor to the hearing only if the judge requests it; some judges prefer voir dire or a brief in-camera interview, especially for older minors.
• Consider a structured settlement annuity when the injury leads to lifelong care needs; they can guarantee future payments and may be favored by the court.
• If the case involves unusual facts (catastrophic injury, cognitive impairment, or multiple claimants), expect more judicial scrutiny and possibly a conservatorship proceeding.

Where to get more authoritative guidance

See Michigan Court Rules for procedures on compromise of claims (MCR 2.201) and consult the probate court rules if you plan to file a petition there. The Michigan courts website contains the official rules and local court contact information: Michigan Courts. For statutory questions, review the Michigan Compiled Laws at the Legislature’s site: Michigan Legislature.

When you should talk to an attorney

Contact a Michigan attorney as soon as you consider settling a minor’s personal injury claim. Early advice helps you structure the deal, limit surprises, and prepare the court submission so the judge can approve the settlement without unnecessary delays.