What is the Most Money that Can Be Distributed to a Minor from a Settlement Before a Conservatorship is Required?

Minors can’t act for themselves in legal proceedings; therefore, they need someone to act in a representative capacity to sue or agree to a settlement. This is called a conservatorship. In some situations, a minor can take the distribution of a personal injury settlement without a conservator.

Michigan Statute § 700.5102(1) states that a person under a duty to pay or deliver money or personal property to a minor may perform this duty by paying or delivering the money or property, in an aggregate value that does not exceed $50,000.00 each year, to any of the following:

• The minor if the minor is married.
• An individual having the care and custody of the minor with whom the minor resides.
• A guardian of the minor.
• A financial institution incident to a deposit in a state or federally insured savings account in the sole name of the minor with notice of the deposit to the minor.

Michigan Court Rule 2.420(B)(4), however, hasn’t made the change in the dollar amount. It says that if the settlement or judgment requires payment of more than $5,000 to the minor either immediately, or if the settlement or judgment is payable in installments that exceed $5,000 in any single year during minority, a conservator must be appointed by the probate court before the entry of the judgment or dismissal.

The judgment or dismissal must require that payment be made payable to the minor’s conservator on behalf of the minor. The court shall not enter the judgment or dismissal until it receives written verification, on a form substantially in the form approved by the state court administrator, that the probate court has passed on the sufficiency of the bond of the conservator.

But if the settlement or judgment doesn’t require payment of more than $5,000 to the minor in any single year, the money may be paid in accordance with the provisions of MCL 700.5102.

In any event, a settlement must be approved by the court, and the judge must consider whether the proposal is fair. And if the claim is for damages involving personal injury:

• The injured person must appear before the court, unless excused for good cause; and
• The judge may require medical testimony, in court or by deposition, pursuant to MCR 2.420(B)(1).

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