Tag: structured settlement
  • Court Approval of Minor Settlements in North Carolina

    A minor injured through negligence or other wrongdoing may bring an action through a representative to recover damages for pain and suffering, permanent injury, and impairment of earning capacity. (A claim for reimbursement of the minor’s medical expenses typically belongs to the parents.) Although minors generally are legally incapable of binding themselves to contracts, the law allows a minor’s claims to be resolved through a settlement agreement. The settlement, however, is not enforceable against the minor unless it has first been investigated and approved by the court. Sigmund Sternberger Found., Inc. v. Tannenbaum, 273 N.C. 658, 677 (1968); Ballard v. Hunter, 12 N.C. App. 613, 619 (1971). Even if the settlement is arranged by a parent, guardian, guardian ad litem, estate administrator, or attorney, the minor cannot be bound absent prior court approval. Sell v. Hotchkiss, 264 N.C. 185, 191 (1965); In re Reynolds, 206 N.C. 276 (1934); Hagins v. Phipps, 1 N.C. App. 63 (1968). The rule applies not just to claims settled after an action is filed, but also to pre-litigation settlements including waivers of a minor’s right to sue. Creech v. Melnik, 147 N.C. App. 471, 475 (2001).

    The purpose of the court’s review is to protect the interests of the minor. The investigation must focus on the minor’s welfare and fairness to the minor under the circumstances. See Redwine v. Clodfelter, 226 N.C. 366, 370 (1946) (minor’s welfare is the “guiding star”); Reynolds v. Reynolds, 208 N.C. 578, 631−32 (1935) (affirming “fair, just, and equitable” settlement). Continue Reading

  • Reviewing Structured Settlement Sales: The Courts’ Role

    “Get Cash for Your Structured Settlement Payments NOW!” “See What Your Structured Settlement Payments Can Do!” “Get the Cash You Need Now!”

    Ever see ads like these and wonder what they’re all about? If you’ve heard of structured settlements, you may know that they are a way for injured parties to receive compensation for their injuries over time—in periodic payments—rather than in an immediate lump sum. Typically funded through the purchase of annuities, these settlements promote financial stability for injured people by preventing the money from dissipating too quickly. They also are a useful way to preserve a minor’s settlement funds until after the minor reaches adulthood. The federal government encourages the use of structured settlements by allowing qualified payments to be excluded from the recipients’ taxable income.

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