Detailed Answer
Short answer: In Nebraska, you generally cannot simply withdraw a minor’s settlement money and spend it freely. Courts protect settlements for minors. To get money out of a court-approved settlement for things like college tuition or medical bills before the child turns 18, you normally must ask the court to approve the withdrawal or set up a court-supervised arrangement (guardian/conservator, trust, blocked account, or structured settlement) that allows payments for those needs.
This is not legal advice. It is information to help you understand common Nebraska procedures so you can decide whether to speak with an attorney.
Why the court protects a minor’s settlement
Nebraska courts treat settlements for minors as property that needs protection until the child can manage money on their own. A judge’s job is to make sure the settlement serves the minor’s best interest. That usually means the court must approve the settlement and any significant use of the settlement funds while the child is still a minor.
Common ways to handle a minor’s settlement in Nebraska
- Court-approved minor’s compromise or settlement: The parties ask the probate or district court to approve the settlement. The court can order how the proceeds will be held and distributed, and it can authorize specific payments for education or medical care.
- Guardian or conservator of the estate: If a guardian or conservator is appointed for the child’s financial affairs, that person may be able to pay authorized expenses from the minor’s funds, subject to court supervision and reporting rules.
- Blocked or restricted bank account: The court can direct that funds be placed in a blocked account that requires court permission to withdraw funds for specific purposes (tuition, surgery, etc.).
- Trust or structured settlement: The court may approve creation of a trust or a structured settlement annuity that pays out according to a schedule or for designated purposes like education and medical care.
- Special needs trust (if applicable): If the child receives government benefits, the court may approve a special needs trust to preserve eligibility for Medicaid or Supplemental Security Income while still using money for the child’s needs.
How you ask the court for early access
- Talk to a lawyer who handles Nebraska minor settlements or guardianships. They can draft and file the proper petition with the correct court.
- File a petition to approve a settlement or to appoint a guardian/conservator of the estate. The petition explains the settlement, who will hold the funds, and why the requested early payments are in the child’s best interest.
- Provide proof of need and documentation. Attach invoices, medical estimates, college acceptance letters or tuition bills, and a proposed plan for how the money will be used and protected.
- Expect the court to appoint a guardian ad litem or attorney for the minor in some cases. That person represents the child’s interests at the hearing.
- Attend a court hearing. The judge will review the petition, the proposed distribution plan, and any objections before deciding whether to allow early withdrawals and under what terms.
- Follow court orders strictly. If the court authorizes payments, the judge will typically order how payments are made (pay provider directly, release funds from a blocked account, etc.) and require accounting.
Practical examples (hypothetical)
Example A: A minor has a personal-injury settlement. The family asks the probate court to approve a trust that will pay medical providers directly for ongoing care and allow withdrawals for college costs. With documentation (medical invoices; estimated college costs), the court approves the trust and a trustee who must report to the court.
Example B: Parents want to use part of a minor’s settlement to pay for emergency surgery. The court approves a one-time payment directly to the hospital from the blocked account after the hospital submits an invoice and the court finds the payment is in the child’s best interest.
Where Nebraska law governs these steps
Procedures for probate, guardianships, conservatorships, and approval of minor settlements are governed by Nebraska’s probate and guardianship statutes and court rules. See Nebraska probate and guardianship statutes for the statutory framework: Nebraska Revised Statutes, Chapter 30 (probate & guardianship). You should rely on a local attorney to identify the exact statutes and forms that apply to your situation.
Helpful Hints
- Do not spend settlement money without court approval. Spending funds prematurely can lead to liability and court sanctions.
- Collect documentation early: invoices, treatment plans, school acceptance letters, tuition estimates, and a clear budget explaining how much you want to use and why.
- Ask the court to order payments directly to providers (school or hospital) when possible. Direct payment limits risk of misuse and is often easier for the judge to approve.
- Consider whether a trust or structured settlement makes sense. These options can protect funds and provide predictable payments for future needs such as college tuition.
- If the minor receives public benefits, consult an attorney about a special needs trust to avoid jeopardizing eligibility.
- Expect costs: court filing fees, possible guardian ad litem or attorney fees, and attorney fees for preparing petitions. Factor these into your planning.
- Work with an attorney experienced in Nebraska minor settlements or guardianship matters. If you need help finding a lawyer, consider the Nebraska State Bar Association directory or local legal aid resources.
Next step: If you want to pursue early access for college or medical expenses, collect the documentation described above and consult a Nebraska attorney who handles minor settlement approvals and guardianship/conservatorship cases. They can evaluate the facts, advise which petition to file, prepare the necessary papers, and represent your child’s interests at the hearing.
This content is educational and informational only and is not legal advice. For advice about your particular situation, contact a licensed Nebraska attorney.