What Will Happen To My Child’s Settlement Money or Money Received from a Judgment?
Many parents worry about what happens to the compensation their child will receive by settlement or at trial.
There are two main ways your child’s injury lawyer will protect your child’s compensation:
- An annuity or structured settlement can be purchased. This is a financial product where a registered insurance company pays a settlement to your child over a period of years, sometimes for the child’s whole life. Generally, payments received will be tax free.
- A second option is a “Henson trust”. A Henson trust is an arrangement where money is held by trustees for the benefit of a disabled child that can be beneficial in the right circumstances.
A third option is payment into Court until your child reaches 18. This is rarely recommended because no interest is paid on the settlement. However, for people who do not accept interest or when the settlement is small or there is a short time until the child turns 18, this option may make sense.
Make sure the lawyer you hire to get compensation for your child talks about these options with you to help you make appropriate choices for him or her.