Detailed Answer
When a minor (someone under 18 in Montana) is injured and the case resolves by settlement, a Montana court usually must review and approve the settlement before money is paid to the child or to the child’s parent or guardian. This court review protects the minor’s legal interests and ensures the settlement is fair, reasonable, and properly handled. Below is a clear, step‑by‑step explanation of the typical process under Montana law and what you should expect.
1. Confirm who can settle on the minor’s behalf
Parents normally have authority to act for their child in many situations, but many insurers, hospitals, and courts require formal court approval before releasing settlement funds for a minor’s personal injury claim. If there is a dispute about who should represent the minor, or if a parent’s interests conflict with the child’s, the court may appoint a guardian ad litem (a court‑appointed advocate) or require a guardianship or conservatorship proceeding. See the Montana Code Annotated for statutes governing guardianship and conservatorship at the Montana Legislature website: https://leg.mt.gov/bills/mca_toc/.
2. Prepare the settlement paperwork and supporting documents
The party seeking court approval files a petition or motion asking the appropriate Montana court to approve the settlement. The petition typically includes:
- The minor’s name and date of birth;
- A description of the claim and the facts supporting the claim (for example, a car crash or medical malpractice);
- The settlement terms (total amount, who is paying);
- Itemization of anticipated deductions: attorneys’ fees, litigation costs, medical liens, health insurance or Medicaid reimbursements, and any other expenses;
- Proposed distribution of net funds (who will receive what and whether funds will be placed in a blocked account, structured settlement annuity, or trust); and
- The name of the minor’s attorney and any guardian or parent providing consent.
Attach copies of the settlement agreement, any medical bills or lien statements, and declarations from the minor’s attorney explaining why the settlement is fair and necessary.
3. Give notice to interested parties
The court requires notice to people and entities with legal interests in the case. That usually includes the minor’s parents or guardians, the opposing party, and any known lienholders (hospitals, health insurers, Medicaid). Montana courts require adequate notice so interested parties can object. The court may also require service and an affidavit proving notice was given.
4. Appointment of a guardian ad litem or guardian (when appropriate)
If the court finds a potential conflict of interest, an unclear parental authority, or if the court wants an independent view of the settlement, it will appoint a guardian ad litem to represent the minor’s interests at the hearing. In cases where a formal guardianship or conservatorship already exists, the guardian or conservator will act on the minor’s behalf and file the petition.
5. Court hearing on fairness and reasonableness
The court reviews the petition at a hearing. The judge examines whether the settlement is in the minor’s best interest. Key issues the court evaluates include:
- Whether the settlement amount is reasonable given the minor’s injuries and future needs;
- Whether attorney’s fees and costs are reasonable and properly documented;
- Whether medical liens, Medicare/Medicaid reimbursements, or other creditors are identified and addressed;
- Whether the proposed method for protecting funds (blocked bank account, trust, or structured settlement) appropriately protects the funds for the minor’s benefit.
The court may ask questions of the parties, hear objections from other interested parties, and require additional evidence before approving the deal.
6. Court order approving the settlement
If the judge approves, the court issues an order that typically does the following:
- Approves the gross settlement amount;
- Authorizes payment of specified attorneys’ fees and litigation costs;
- Directs payment or resolution of medical liens or enrollment of Medicaid lien repayment if applicable;
- Specifies how the net settlement will be held and distributed (for example, deposit to a blocked account, purchase of a structured settlement annuity, or creation of a minor’s trust); and
- Directs the clerk or defendant to release funds consistent with the order.
7. Protecting the funds after approval
Montana courts commonly require one of these options for protecting the minor’s funds:
- Deposit into a blocked (restricted) bank account requiring a court order for withdrawal;
- Creation of a trust or custodial account under a statute such as the Uniform Transfers to Minors Act or a court‑supervised trust;
- Purchase of a structured settlement annuity that pays income over time for the child’s needs.
The court’s order will specify who can request disbursements (e.g., for education, medical care, or housing) and whether future court approval is needed for larger withdrawals.
8. Resolving liens and subrogation claims
Health insurers, Medicaid, or hospitals may have claims against the settlement for medical payments. The petition should identify all likely lienholders and propose a method to satisfy or compromise those liens. If federal or state Medicaid has paid for care, federal law and state Medicaid rules may require repayment from the settlement. Because these issues can be complicated and vary with the facts, attorneys usually negotiate lien reductions and provide documentation to the court so it can approve resolution of those claims.
9. Final distribution and ongoing court supervision (if any)
Once the court’s conditions are met (liens paid or resolved, funds deposited as ordered), the court will authorize final distribution. If the funds remain under court supervision, periodic reporting to the court may be required until the minor reaches adulthood or until the trust/blocked account is closed.
Hypothetical example (short)
Jane, a 10‑year‑old injured in a car crash, accepts a $100,000 insurer offer. Jane’s lawyer files a petition with the Montana court asking approval, lists $30,000 in medical liens and $20,000 in attorney fees, and proposes depositing the net $50,000 into a blocked bank account requiring court approval for withdrawals. The court holds a hearing, confirms the settlement is fair, approves the lien payments and fees, signs an order, and directs the insurer to pay the funds into the blocked account. The judge’s order explains when funds may be released for education or medical needs.
Where to find Montana statutes and court rules
For the statutes that govern guardianship, conservatorship, and probate procedures, and for forms and guidance on probate and guardianship matters, consult the Montana Code Annotated and the Montana Judicial Branch resources:
- Montana Code Annotated (MCA) — official code: https://leg.mt.gov/bills/mca_toc/
- Montana Judicial Branch — probate and guardianship information: https://courts.mt.gov/selfhelp/probate
Because statutes and court procedures can change and may depend on the specific county court or district court, consult the Montana Legislature and the Montana Judicial Branch pages above for the most current rules and local forms.
Important note
This explanation summarizes common steps but does not replace review of the Montana statutes and local court rules that apply to your case.
Helpful Hints
- Work with an attorney experienced in minors’ personal injury settlements and Montana probate/guardianship practice. They will draft the petition, negotiate liens, and represent the minor at the hearing.
- Gather complete medical records and billing statements early so lienholders can be identified and addressed before the hearing.
- Be ready to explain how the settlement will protect the child’s future needs (education, medical care, long‑term care) — judges focus on the child’s best interest.
- Consider structured settlements or blocked accounts to protect funds from misuse and to provide long‑term financial security.
- Expect the court to closely scrutinize attorney’s fees; provide clear billing statements and explain any contingency fee division.
- If Medicaid or other government health programs paid for treatment, contact them early; they often have repayment claims that must be resolved.
- Keep records of all court orders and account statements. If the court requires periodic reporting, file timely reports to avoid sanctions or delays.
- If parties disagree about settlement fairness or distributions, expect delays — the court may appoint a guardian ad litem to protect the minor’s interests.
- Ask the court for clear language in the order about who can request withdrawals and for what purposes, and whether court approval is needed for large expenditures.
Disclaimer: This article provides general information about Montana procedures for approving a minor’s personal injury settlement and is not legal advice. Laws and court procedures change. For advice tailored to a particular situation, consult a licensed Montana attorney.