Why and When a Court Approves a Minor's Settlement in Kentucky

By the FigureMyTax Editorial Team · How we calculate

A Kentucky person with legal custody of a minor may settle the child's claim without court approval if no guardian or conservator has been appointed and the amount due to the child, after medical expenses, liens, attorney fees and costs, is $25,000 or less. Above that, the no-court procedure is not available.

The rule

KRS 387.278(1) lets a person having legal custody of a minor settle or compromise the minor's claim if (a) no guardian or conservator has been appointed; (b) the total settlement proceeds due to the minor, after reduction by all medical expenses, medical liens, all other liens and reasonable attorney fees and costs, are $25,000 or less; (c) the money is paid as the statute requires; and (d) the person completes an affidavit.

The affidavit

The affidavit states that the person has made reasonable inquiry and, to the best of the person's knowledge, the minor will be fully compensated, or there is no practical way to get more from the other party, and that the person understands the law requires the money to go into a restricted account or an annuity. The attorney keeps it for five years.

Effect of a compliant settlement

A signed agreement that complies is binding on the minor without court approval or review, has the same effect as if the minor were a competent adult, and fully releases the claims it covers (387.278(5)). A person who settles in good faith is not liable to the minor for claims arising from the settlement.

Above $25,000, or if you prefer a court

Nothing prevents anyone acting for the minor from filing for guardianship, limited guardianship or conservatorship in the District Court and asking it to approve the settlement and oversee the proceeds (387.278(9)). Above $25,000, the no-court procedure does not apply.

Who is a minor

Persons of the age of eighteen are of the age of majority for all purposes in Kentucky, except for listed matters such as alcoholic beverages and care and treatment of children with disabilities (KRS 2.015).

Deadlines

A tort action for a motor vehicle injury must be filed within 2 years after the injury or the last no-fault payment (304.39-230(6)). KRS 413.170 lets an infant sue within the same time after the disability ends for actions in KRS 413.090 to 413.160 (413.170), and the limitation for a no-fault benefits claim counts the period of disability. We did not confirm how those provisions apply to a motor vehicle tort claim, so ask an attorney before assuming you have time. See how the money must be held and run your numbers in the Kentucky minor's settlement calculator.

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