How a Parent or Guardian Can Access a Minor’s Settlement Funds in Mississippi

Disclaimer: This is educational information, not legal advice. For help applying these ideas to your situation, consult a licensed Mississippi attorney.

Detailed Answer — Can settlement money be used for college or medical expenses before the child turns 18?

Yes — but only through specific legal routes and typically with court approval in Mississippi. When an insurer or another party pays money to compensate a minor (for example after an accident), the money generally belongs to the child. Mississippi courts and state procedures are designed to protect minor beneficiaries. That means a parent, guardian, or other adult cannot simply spend the funds without following the legal steps required by the court or applicable custodial/settlement rules.

Common legal paths to access or manage a minor’s settlement funds before majority include:

• Court-approved settlement and guardianship of the estate. If a minor receives a settlement, a county court (often chancery or probate court depending on county practice) will usually require the settlement be approved by a judge. The court may appoint a guardian of the minor’s estate or require the funds be held in a supervised account. The guardian of the estate can then petition the court to use part of the funds for the child’s reasonable needs — including medical care or education — if the court finds the disbursement is in the child’s best interest.
• Blocked or custodial accounts. Courts frequently require settlement proceeds be placed into a blocked (court-supervised) account, a custodial account, or trust. For example, funds can be put into a court-ordered blocked bank account that cannot be withdrawn without a judge’s permission. Another option is to place funds into a trust, with a trustee authorized to pay for medical treatment, education, or living expenses under the trust terms.
• Structured settlements or annuities. Parties sometimes arrange payments over time through an annuity or structured settlement contract. The settlement can be structured to provide periodic payments for school or medical needs before the child reaches majority if all parties and the court agree.
• Special-needs planning. If the child receives means-tested benefits (Medicaid, SSI), placing settlement funds into a properly drafted special-needs (supplemental needs) trust can allow funds to pay for medical care and quality-of-life items without disqualifying the child from public benefits. These trusts must meet strict legal requirements and typically require court approval.

In every route, the common themes are: the court reviews the plan, the court protects the minor’s long-term interests, and distribution for education or medical costs usually requires specific findings that the spending is reasonable and in the child’s best interest.

What will the court consider?

When deciding whether to allow early access to funds for college or medical expenses, the court will consider factors such as:

• The purpose of the requested disbursement (medical necessity, tuition, housing, etc.).
• The amount requested and whether it is reasonable relative to the child’s total settlement.
• Whether other funds or insurance are available to cover the need.
• How the remaining funds will be preserved for the child’s long-term welfare.
• Any competing claims or creditors.

Procedural steps you should expect in Mississippi

1. File a petition with the appropriate court to approve the settlement (often the court where the minor lives or where the lawsuit was filed).
2. Ask the court to appoint a guardian of the estate or to place funds in a blocked account/establish a trust.
3. Include a proposed plan for how funds will be managed and when distributions for college or medical expenses will be made.
4. Attend a hearing. The judge will review evidence and may require receipts, school invoices, or medical records to justify withdrawals.
5. If approved, obtain a court order authorizing the bank, insurance company, or defendant to release funds as directed by the order.

Because Mississippi procedures can vary by county and by the court handling minor settlements, working with a Mississippi attorney experienced in minor settlements, guardianships, and trusts will streamline the process and improve the chance the court approves necessary disbursements.

Where to read more about Mississippi courts and statutes

For general information about Mississippi courts and local rules, see the Mississippi Judiciary site: https://www.courts.ms.gov/. For full text of Mississippi laws and to search the state code, visit the Mississippi Legislature site: https://www.legislature.ms.gov/.

Helpful Hints — Practical tips for parents and guardians

• Consult a Mississippi attorney early. A lawyer can file the correct petitions, prepare the proposed settlement approval order, and explain county-specific practices.
• Gather documentation in advance. Keep medical bills, treatment plans, college acceptance letters, tuition invoices, and scholarship information ready to show the court the need for funds.
• Consider structured settlements or trusts for education. A trust or structured settlement can be written to prioritize tuition or healthcare and preserve remaining funds for later needs.
• Special-needs concerns require special planning. If the child is on Medicaid or SSI, speak with an attorney who regularly handles special-needs trusts to avoid jeopardizing benefits.
• Expect oversight and reporting. Guardians or trustees often must provide periodic accountings to the court showing how funds were spent.
• Don’t rely on informal promises. Even if both parents agree, a bank or insurer will often require a court order before releasing settlement money for a minor.
• Ask about tax and financial aid impacts. Large settlements can affect financial aid eligibility and might have tax consequences depending on how funds are structured; check with a tax professional or financial aid advisor as well as your attorney.

When to contact an attorney

If you are a parent, guardian, or the child’s representative and you need to use settlement money before the child reaches majority for college or medical costs, contact a Mississippi attorney who handles minor settlements, guardianship, and trusts. Early contact avoids delays and increases the likelihood that the court will approve necessary distributions.

Again, this information is educational only and does not replace advice from a licensed Mississippi attorney who can review your facts and prepare the required court filings.