Short overview (what this covers)

This article explains, step by step, how courts in New Mexico typically review and approve a settlement on behalf of a minor (someone under the age of majority). The process is designed to protect the minor’s legal and financial interests. Below you’ll find a sample hypothetical, the usual documents and filings, the court review process, and practical tips to make approval more likely and faster.

Hypothetical facts to illustrate the steps

Example: A 14-year-old passenger is injured in a car crash. The insurer offers $75,000 to settle the minor’s personal injury claim. The parents want to accept, but New Mexico courts must approve the settlement before settlement funds can be distributed to the minor.

Step-by-step: How to get court approval in New Mexico

1. Hire a lawyer experienced in minor-compromise cases

Most parties hire a personal-injury attorney. The attorney prepares the settlement paperwork, explains different distribution options (lump sum, structured settlement, or blocked account), and ensures medical liens and government interests (like Medicaid) are addressed. Even if parents try to handle this without counsel, courts often require clear documentation and sometimes appointment of a guardian ad litem.

2. Identify who must sign and whether a guardian or next-friend is needed

A parent or legal guardian may be the minor’s representative for settlement, but the court will confirm that the person approving the deal is legally authorized to act. If there is any dispute about parents’ authority, if no guardian exists, or if the court thinks the minor’s interests need independent protection, the court may appoint a guardian ad litem or require a next-friend to represent the minor in court.

3. Prepare the petition to approve the compromise

The filing to the district court typically includes:

• A petition or motion asking the district court to approve the settlement (often called a Petition for Approval of Compromise of Minor’s Claim).
• The written settlement agreement and any releases.
• An itemized statement showing how the gross settlement amount will be divided: attorney fees, costs, medical liens, government liens, and net amount for the minor.
• A proposed order for the judge to sign and any suggested protections (e.g., blocked account, structured settlement annuity, or court-ordered guardianship savings account).
• Affidavits or declarations verifying the minor’s age, identity of parents/guardians, and that the settlement is voluntary and in the minor’s best interest.

4. Address liens, subrogation, and governmental interests before the hearing

Identify and resolve outstanding medical provider liens, health-insurer or Medicaid reimbursement claims, and any outstanding provider or hospital bills. The court will expect to see how those obligations are being handled. If Medicaid or other public benefits might have a claim to some of the settlement, follow applicable federal and state procedures to resolve reimbursement issues before distribution.

5. File the petition with the correct court and provide notice

Minor-compromise petitions are usually filed in the District Court where the minor lives or where the underlying personal-injury case is pending. The New Mexico district courts have jurisdiction over such petitions. See New Mexico Courts (District Courts) for court locations and procedures: https://nmcourts.gov/courts/district-courts/.

6. Court review (hearing or ex parte review)

The judge will review the petition to determine whether the settlement is fair, reasonable, and in the minor’s best interest. The court examines:

• Whether the amount is reasonable for the injuries and future needs.
• Whether attorney fees and costs are reasonable.
• Whether liens and subrogation claims are properly accounted for.
• How the funds will be protected for the minor (blocked account, annuity, or guardianship).

Some courts require an in-court hearing where counsel and parents appear; others will allow the petition to be approved on submitted papers. The New Mexico Rules of Civil Procedure address representation of minors and incompetent persons; see the rules here: https://nmcourts.gov/rules-of-civil-procedure/.

7. Court order and distribution plan

If the judge approves, the court issues an order approving the compromise and directing how funds are to be handled. Common directives include:

• Payment of approved attorney fees and costs directly from settlement proceeds.
• Payment of medical liens or placement of funds in escrow until liens are resolved.
• Placement of the minor’s net recovery into a blocked (court-controlled) bank account or purchase of a structured-settlement annuity that begins payments at specified times.
• Instructions about future access to funds—who can withdraw and under what circumstances.

8. Carry out the court’s order and close the case

After the court signs the order, the settling parties follow the order’s instructions: insurance company pays the settlement to the designated payees, fees and liens are paid, and the minor’s share is placed in the protected account or annuity. The attorney should file a final accounting with the court if required.

Timing, fees, and common pitfalls

Timing: Expect at least several weeks from filing to court approval, longer if liens or government reimbursement issues are complex. Attorney fees: Courts closely scrutinize contingency fees and may reduce unreasonable requests. Common pitfalls include failing to identify liens, not requesting the court’s protective distribution method, and not providing adequate notice to interested parties.

Relevant New Mexico authorities and resources

• New Mexico Rules of Civil Procedure (representation of infants and incompetent persons and related procedural rules): https://nmcourts.gov/rules-of-civil-procedure/.
• New Mexico Legislature — statutes and searchable code (useful if you need to review guardianship, probate, or insurance statutes): https://nmlegis.gov/Laws_and_Legislation/Statutes.
• New Mexico District Courts (locations and clerk contact information): https://nmcourts.gov/courts/district-courts/.

Helpful Hints

• Begin lien resolution early: contact medical providers, health insurers, and Medicaid administrators to identify any repayment obligations.
• Consider a structured settlement or blocked account to protect the minor’s long-term needs and reduce the chance of wasteful spending when the minor reaches adulthood.
• Prepare a clear, itemized settlement breakdown for the court—judges are much more comfortable approving settlements with transparent accounting for fees and liens.
• Expect the court to review attorney fees—be ready to justify the percentage and the work performed.
• If the minor receives public benefits, check how the settlement could affect eligibility and whether an account can be structured to preserve benefits.
• Ask the court about required forms or local rules—procedures and required documents vary by district.
• Keep records of all communications with insurers, medical providers, and government benefit administrators in case the court asks for proof.