Structured Settlements for Minors in New York Personal Injury Cases

Why Structured Settlements Are Recommended for Children

When a child is injured in an accident in New York City, the financial recovery process requires special legal protections. Minors cannot legally manage large sums of money, and courts want to ensure a settlement will provide long-term financial security.
Structured settlements are the preferred solution in many New York personal injury cases involving children because they:

• Provide steady, tax-free income for medical care, education, and living expenses.
• Protect against mismanagement or exploitation of funds.
• Guarantee that money will be available during important life stages such as college, rehabilitation, or starting a career.

What Is a Structured Settlement?

A structured settlement is a court-approved financial arrangement in which a child’s settlement is paid in periodic installments—often through a secure annuity from a highly rated life insurance company—instead of a lump sum.
In New York, these arrangements are commonly used in birth injury claims, car accidents involving minors, playground accidents, medical malpractice cases, and wrongful death claims where a parent’s financial support is lost.

Key Features:

• Tax-free under federal law for personal injury settlements.
• Fixed, guaranteed returns (often 3%–10%) not tied to the stock market.
• Custom payment schedules to meet specific needs.
• Court oversight for added protection.

Benefits of Structured Settlements for Injured Minors in NYC

• Financial Discipline: Payments are timed to match a child’s educational milestones, medical needs, and other expenses.
• Customizable Plans: Can include immediate payments for urgent medical bills, lump sums for college tuition, or monthly support for living expenses.
• Guaranteed Stability: Immune to market fluctuations.
• Cost-Effective: Avoids annual trustee or management fees.
• Creditor Protection: Funds are safeguarded from creditors and judgments.

Common Payment Scheduling Options

• Immediate payments for urgent medical care in New York hospitals.
• Increased disbursements during college years at CUNY, SUNY, or private universities.
• Lump sums at ages 18, 21, or after graduate school.
• Structured education funds for tuition, housing, and books.

Special Needs Considerations

If a child has a disability, a Special Needs Trust (SNT) can be combined with a structured settlement to:

• Maintain eligibility for SSI and Medicaid.
• Provide lifetime care without exceeding asset limits.
• Fund both immediate and long-term expenses.

Court Approval Process in New York

Under New York Civil Practice Law and Rules (CPLR), all settlements involving minors must be approved by a judge. This process, often called an Infant Compromise Order, typically takes 3–6 months and ensures:

• The settlement is in the child’s best interest.
• The insurance company funding the annuity is financially stable (A-rated or better).
• The payment plan is designed to protect and grow the funds.

Once approved, payment terms are permanent unless the court allows changes in rare circumstances.

Funding Options & Safeguards

• Annuities: Reliable, scheduled payments over years or decades.
• Blocked Accounts: Court-restricted accounts for limited short-term needs.
• Trusts: Flexible management for children with special needs.

Advantages Over Lump-Sum Payments or Blocked Accounts

• Higher growth potential than blocked accounts in New York banks.
• Prevents full access to large sums at age 18.
• Allows customized distributions for education, healthcare, or housing.

Risks & How to Avoid Them

• Inflexibility: Plan carefully since terms are hard to change.
• Insurer Risk: Only use financially stable insurance companies.
• Inflation Concerns: Opt for inflation-adjusted payments.

Alternatives

• Minor settlement trusts for flexible fund management.
• Hybrid plans combining an upfront lump sum with structured payments.

FAQs About Structured Settlements for Minors in New York

Can a minor access funds before turning 18?
Not without court approval, and only for significant needs such as medical care or tuition.

Are structured settlements taxable?
For personal injury cases in New York, payments are generally tax-free under federal law.

Can the settlement be sold?
Selling requires court approval and proof it is in the child’s best interest.

Why Choose Greenstein & Pittari for Your Child’s Injury Settlement?

• Local Harlem office plus six additional locations: Bronx, Brooklyn, Queens, Staten Island, Yonkers, and Nassau County.
• No fee unless we win – Our Fee Guarantee.
• Bilingual services in English and Spanish.
• Hundreds of 5-star reviews from satisfied New Yorkers.
• We deal with the insurance companies so you can focus on your child’s recovery.
• Recognized among Best Lawyers and Super Lawyers.

Don’t Be a Victim Twice – Call 1-800-VICTIM2 (1-800-842-8462)

At Greenstein & Pittari, LLP, we are New York personal injury attorneys dedicated to protecting injured children’s financial futures. We offer free consultations, work on contingency, and fight aggressively for your family’s rights.