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Minor's Compromise

 
The law says money received on behalf of a child must be handled in a special way. This section provides guidance on how the Court may provide assistance.
  1. What is a Minor’s Compromise?
  2. Is an Incompetent Person’s Compromise the same as a minor’s compromise?
  3. What if my child is injured and receives a settlement?
  4. Can either parent sign a settlement agreement on behalf of the child?
  5. What if the child has a legal guardian of the estate?
  6. Forms for Petition for Minor's Compromise
  7. What do I do with the Court forms?
  8. Where can I read more on the laws for a Minor’s Compromise?
  1. What is a Minor’s Compromise?
    A Minor's Compromise is when an adult signs on behalf of a child so the child can receive money. The law does not allow the child to sign for him or herself until s/he becomes an adult.

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  3. Is the process for an Incompetent Person’s Compromise the same as a Minor’s Compromise?
    Basically, yes. An Incompetent Person’s Compromise, is when another adult, who is appointed by the Court, signs and receives money on behalf of the incompetent person. (An incompetent person is an adult who is unable to make decisions for him or herself.)

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  5. What if my child is injured and receives a settlement?
    Under the law, a minor child cannot sign a contract or other legally binding agreement.

    But if your child has a claim for injuries caused by an accident, then you or the child’s guardian of the estate, can sign a settlement agreement on behalf of the child.

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  7. Can either parent sign a settlement agreement on behalf of the child?
    Yes, if both parents live with the child. If not, only the custodial parent or legal guardian can sign.

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  9. What if the child has a legal guardian of the estate?
    The guardian, conservator, or the guardian ad litem can petition the Court to transfer the funds using one of these methods:
    • To an insured account in a financial institution or into a single premium deferred annuity, subject to withdrawal only on court order;
    • To a custodian under the Uniform Transfers to Minors Act;
    • To the trustee of a trust that the minor can revoke when the minor turns 18;
    • To the trustee of a special needs trust for the benefit of the minor as described in Probate Code Section 3604. (This type of special needs trust is only for minors who receive public benefits because of disability and high medical expense. When the beneficiary dies, the trust must reimburse the state for the state’s expenses for the individual's medical costs, up to the full amount left in the trust at the time of the beneficiary’s death.)
    If there is no guardianship of the estate, the court that makes the order for settlement of the child's claim can make an order to do any of the following:
    • Establish a guardianship of the estate and transfer the funds to a guardian;
    • Transfer the funds to the county treasurer for deposit under specified conditions;
    • Deposit of the funds into an insured account in a financial institution, subject to withdrawal only on ourt order;
    • Purchase of a single-premium deferred annuity, subject to withdrawal only on court order;
    • Transfer to the trustee of a special needs trust as described in Probate Code Section 3604;
    • Transfer to a custodian under the California Uniform Transfers to Minor Act;
    • Transfer to the trustee of a trust that the minor can revoke when the minor attains age 18.
    If the settlement is $20,000 or less, the court will make whatever order is in the best interests of the child. If the settlement is $5,000 or less, the court will order a transfer of funds to the parent of the child, in trust for the child.

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  11. Forms for Petition for Minor's Compromise
    • MC-350 Petition to Approve Compromise of Claim
    • CIV-010 Application and Order for Appointing Guardian Ad Litem
    • MC-351 Order Approving Compromise of Claim
    • MC-355 Order to Deposit Money Into Blocked Account
    • MC-356 Receipt and Acknowledgment of Order for the Deposit of Money Into Blocked Account

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  13. What do I do with the Court forms?
    Step 1
    Fill out and file these forms with the probate clerk. Unless you have an Order that waives a medical report, attach a current medical report prepared within four weeks of the date of petition.

    There is no form for the Order to waive the medical report. You must type this Order on pleading paper and a judge must sign it before you can file your petition.

    Step 2
    Pay the filing fee. (If you have a civil case, there is no fee.)

    Click here to see the fees to file a "Petition to compromise claim of minor".

    Step 3
    If the money (settlement) to be received on behalf of the child is more than $5,000, there will be a hearing.

    (Contact the appropriate court for the schedule of probate hearings)

    When you file your forms, the clerk will tell you the date of your hearing.

    Or, call the Probate staff. Their phone number is listed under "Probate Filings"

    Note: An Expedited Petition for Court Approval of Compromise may be used if the requirements of California Rule of Court 7.950(5) are met.

    Step 4
    If the judge approves your petition, file the orders MC-351 and MC-355.

    Step 5
    Take a certified copy of the Order MC-355 to the bank along with form MC-356.

    The bank clerk must sign the Receipt (MC-356).

    Then, you file the Receipt with the Probate clerk.

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  15. Where can I read more on the laws for a Minor’s Compromise?
    Read Probate Code Section 3600 and the following sections.

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