Injured Children and the Minor Settlement Process in Kentucky

Reviewed by Larry Forman, Attorney

When a child is hurt in a car crash, a dog attack, at a pool or at birth, parents naturally expect to handle the insurance claim. But a child can't sign a binding release, and in most cases a parent can't simply sign one for them and deposit the check. Kentucky has specific rules for a minor settlement: who can sign, when a court must approve it, and where the money has to go until the child turns 18.

This guide explains those rules, the separate claim parents have for their own losses, and how structured settlements can protect a child's future.

Why a child's claim is handled differently

The law protects minors from bad deals, including deals their parents might accept in good faith. That's why:

• A lawsuit for a child is brought by a guardian or conservator, or by a "next friend" (often a parent) if there's no guardian (Kentucky Civil Rule 17.03). A next friend must live in Kentucky and file an affidavit showing the right to sue for the child (KRS 387.300).
• The money belongs to the child, not the parents. It generally can't be used for household bills or for support the parents are legally required, and able, to provide (KRS 387.065(6)).
• Insurers want a release that will hold up. A release that skipped the required steps could be challenged when the child turns 18, so insurers and courts take the process seriously.

Two claims: the child's and the parents'

An injury to a child usually creates two claims:

1. The child's own claim, for pain and suffering, permanent injury, scarring, and loss of future earning capacity. This is the money that has to be protected.
2. The parents' claim for the child's medical expenses and loss of services while the child is a minor. Kentucky treats it as a separate claim that belongs to the parents (Blackburn v. Burchett, Ky. 1960).

The two claims can have different deadlines. In Blackburn, the parent's claim was barred by the one-year limit (KRS 413.140(1)(a)) even though the child's own claim was still open. For many claims, the child's deadline is paused until the child turns 18 (KRS 413.170). Motor vehicle claims, medical malpractice and claims against government bodies have their own rules. Board of Claims cases (for example, against a public school board) get no extra time for minors: a parent or guardian must file within the same deadline that applies to adults (KRS 49.120(5)). Don't count on waiting. Evidence fades, and the parents' claim may expire long before the child's does. See our Kentucky statute of limitations guide.

Path 1: A minor settlement of $25,000 or less

Kentucky now has a simpler route for smaller settlements, added in 2022 (KRS 387.278). A person with legal custody of the child may settle the child's claim without a court proceeding if:

• No guardian or conservator has been appointed for the child
• The child's net share is $25,000 or less, after subtracting all medical expenses, medical liens, other liens, and reasonable attorney fees and costs
• The custodian signs an affidavit or verified statement confirming that they made a reasonable inquiry and believe the child will be fully compensated, or that there's no practical way to get more. The custodian must also acknowledge that the money must go into a restricted account or annuity. If a lawyer is involved, the lawyer keeps the affidavit for five years.
• The money goes into a restricted savings or investment account, or buys an annuity with the child as sole beneficiary. If a lawyer receives the funds, the lawyer must deposit them directly. If the child is in state custody, the Cabinet for Health and Family Services sets up a restricted trust account.

Money in the restricted account can come out only by court order, when the child turns 18 or is emancipated, or if the child dies. A settlement that follows these rules is binding on the child "without the need for court approval or review."

Families can still choose to open a conservatorship and ask the court to approve even a small settlement (KRS 387.278(9)), and some insurers may still ask for that.

Path 2: Larger settlements need a conservator and court approval

When the child's net share is more than $25,000, or a conservator already exists, the settlement goes through the court.

Appointing a conservator. District Court has exclusive jurisdiction over conservatorships for minors. The case is usually filed in the county where the child lives (KRS 387.020). Any interested person may petition for a conservator for a child "who needs a conservator to settle or compromise claims" (KRS 387.025).

• The petition lists the child, the parents, the child's property and the proposed conservator.
• The proposed conservator files a verified application.
• The court holds a hearing, with at least five days' notice to the parents and others named. A child over 14 also gets notice.

Approving the settlement. If a lawsuit has been filed, the court handling the lawsuit approves the settlement. If not, the District Court where the conservator qualified approves it. Once it's approved, the conservator can sign the release (KRS 387.125(6), which applies to conservators through KRS 387.137). Expect the court to look at the fairness of the amount, the attorney fees and costs, the liens being paid, and how the child's money will be held.

Protecting the money.

• Restricted accounts. The court may order the funds deposited in a bank or a single-premium deferred annuity, with withdrawals allowed only with court permission (KRS 387.122). When it does, the conservator doesn't need a surety on the bond (KRS 387.070(3)(b)).
• Accountings. The conservator files an accounting one year after appointment and every year after that. If the estate is $5,000 or less, accountings are every two years (KRS 387.175).
• At 18, the remaining funds are paid to the child, unless the child has been found disabled under Kentucky's adult guardianship law (KRS 387.065(8)).

Structured settlements for children

A structured settlement pays some or all of the child's recovery over time instead of in one lump sum. It's usually funded by an annuity. Payments can be scheduled for when the child turns 18, for college years, or for life. Damages for physical injuries are generally excluded from federal income tax whether they're paid "as lump sums or as periodic payments" (26 U.S.C. § 104(a)(2)).

Kentucky also protects these payments later in life. A payee can't sell structured settlement payments unless a court approves the transfer in advance. That requires written disclosures and a finding that the sale is necessary to avoid imminent financial hardship (KRS 454.431).

A structure isn't right for every case. It locks in payments that can't easily be changed. But for larger recoveries and younger children, it's worth evaluating alongside a restricted account.

Medical bills, liens and children with disabilities

• Liens come out first. Medicaid, KCHIP, health plans and providers may claim repayment for the child's medical care. The $25,000 test in KRS 387.278 is measured after liens. See medical liens on Kentucky settlements.
• Future medical care after 18 belongs in the child's claim, so it needs evidence from treating doctors.
• Children who will need lifelong care. Money in a child's name can affect eligibility for needs-based benefits. Ask about a special needs trust before the settlement is finalized.

Common ways children are hurt, and who pays

• Car crashes. A child passenger's claim often involves PIP on the vehicle, the at-fault driver's liability coverage and UIM. See passenger injury claims.
• Dog attacks. See our dog bite page.
• Bike and pedestrian crashes. See bicycle and pedestrian collisions.
• Birth injuries. See our birth injury page.
• Brain injuries and fractures, whose full effects may not show until a child is older. See traumatic brain injury and broken bones.

If a child dies, the claim follows the wrongful death rules instead. See wrongful death settlement distribution.

How Forman & Associates handles children's cases

We document the child's injuries for the long term, not just the first few months. That matters because growth, school and future earning ability are part of the claim (see what drives case value). We pursue the parents' claim on time, negotiate the liens, and handle the conservatorship petition and the approval hearing, including evaluating a structured settlement. And if the insurer won't pay fairly, we try the case. Larry Forman has tried 50+ jury trials and won 95% of them. Learn more about Larry Forman.

Minor settlement FAQs

Can a parent settle a child's injury claim in Kentucky?

Sometimes. If no guardian or conservator exists and the child's net share is $25,000 or less, a custodial parent may settle by signing an affidavit and putting the money in a restricted account or annuity. Larger settlements require a conservator and court approval.

Does every minor settlement need court approval?

No. Settlements that follow KRS 387.278 are binding without court approval. Larger settlements, and any settlement made through a conservator, are approved by the court.

Where does a child's settlement money go?

Into a restricted account, an annuity or a structured settlement, or a court-supervised conservatorship. It isn't paid to the parents to spend.

Can we use the money for the child's expenses before 18?

Only with court permission. Courts generally won't approve spending on support that parents are legally obligated and financially able to provide.

When does my child get the money?

Generally at 18, unless the settlement is structured to pay later or over time, or the child has been found disabled.

How long do we have to file a claim for an injured child?

The child's own deadline is often paused until 18. The parents' claim for medical bills is not. Motor vehicle, malpractice and government claims have special rules, so talk to a lawyer soon.

Talk to us about your child's injury

We'll make sure your child's settlement is done right and protected for the future. Get a free case evaluation or call (502) 931-6788. No fee unless we win. Our office is at 1139 S. 4th St., Louisville, KY 40203. More guides are in our Kentucky Injury Resource Center.

This page is general information about Kentucky law as of October 2026, not legal or tax advice.