Why and When a Court Gets Involved in a Minor's Settlement in New Mexico

By the FigureMyTax Editorial Team · How we calculate

We did not find a New Mexico statute or rule that says every child's injury settlement needs a judge. The probate code lets a payer pay up to $10,000 a year to a custodian, guardian, insured account or Uniform Transfers custodian, the court rules require a guardian ad litem for an unrepresented child, and practice sources say courts approve these settlements.

The $10,000-a-year payment rule

NMSA 45-5-103 says a person who owes money to a minor may discharge that duty, in amounts not exceeding $10,000 per year, by paying a person with care and custody of the minor, a guardian, a federally insured savings account in the minor's sole name or a Uniform Transfers to Minors Act custodian. It does not apply if the payer knows a conservator has been appointed or a proceeding for one is pending. The recipient must use the money for the minor's support and education and turn any balance over at majority.

Guardians ad litem

Under Civil Rule 1-017, which we read in a secondary rules source, a minor without a duly appointed representative may sue by next friend or guardian ad litem, and the court must appoint a guardian ad litem for an unrepresented minor or make any other order it deems proper to protect the minor.

Conservators

A court may appoint a conservator when a minor owns property that requires management or protection (45-5-401), and a conservator may settle a claim by compromise (45-5-424(C)(19)).

What we did not find

We found no dollar threshold above which approval is required and no rule exempting small settlements. A practice source says that when a court approves a child's settlement as fair, the child will have difficulty challenging it after turning 18. Ask the court or a lawyer before you sign a release.

Who is a minor, and deadlines

A person who has reached 18 is an adult (NMSA 28-6-1). The time to sue is extended for a minor so that the minor has one year from the end of the incapacity (37-1-10), about age 19, which is short. Most injury actions otherwise have 3 years (37-1-8). Ask an attorney before assuming you have time. See how the money may be held and run your numbers in the New Mexico minor's settlement calculator.

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