Restricted Accounts and Structured Settlements for a Child's Settlement in Illinois

By the FigureMyTax Editorial Team · How we calculate

The two Illinois circuit documents we read direct a child's settlement into a restricted account or a structured settlement, with a guardian of the estate and a bond where the net is over $10,000. Rules differ by county.

Lake County

The Lake County order form provides that proceeds may be used to buy a structured settlement; that where net proceeds exceed $10,000 no funds are disbursed until the probate court authorizes the guardian of the estate and approves a bond; and that where net proceeds are under $10,000 the funds go to a parent or legal representative and are deposited in a court-approved account, not to be withdrawn without court approval or before majority.

16th Circuit

The 16th Circuit's local rule requires that, for a lump sum, a guardian of the estate be appointed for the sole purpose of receiving the proceeds, with a bond of twice the amount likely to come into the representative's hands (one and a half times with a surety company). Proceeds due a minor go into a restricted account at a court-approved institution with the language "No withdrawals, expenditures or transfers" before majority unless the court orders otherwise. Where the minor's share is $15,000 or less, the court may in its discretion order it distributed directly to the parent or guardian to be used solely for the minor.

Structured settlements

A structured settlement pays over time and, in the 16th Circuit, annuity payments before majority are paid to the minor's estate and not withdrawn until majority unless the court orders otherwise. The trade-off is predictability and protection against spending everything at once, against less flexibility if needs change.

What we did not find

We read two local documents, not the rules of every county, and no statute that requires a restricted account. Ask the court what it will require. Then read why a court approves a child's settlement and how fees are reviewed, and see what is left in the Illinois minor's settlement calculator.

This is general information, not legal advice, and the state comparisons above are illustrative, not an exhaustive survey. Confirm how Illinois's rules apply to your specific case with a licensed Illinois attorney.