I just read an article in the New York Times about a woman charged with stealing her 11-year-old daughter’s medical malpractice settlement to pay for liposuction, a “tummy tuck” procedure, online shopping, plane tickets, restaurant bills – you name it. She was using her child’s settlement money like her own private piggy bank!
The settlement was for medical malpractice that had left the child with severe, lifelong limitations in the use of her right arm. The settlement was “structured” so that the victim would get payments every five years or so starting at age 18. She’ll need the money because of her severe income limitations! (We at Michaels & Smolak have set up countless structured settlements like this one for injured children.)
But some $67,000 of the money was placed in a judicially protected savings account. Such a court-approved account is set up for the child to access – with accrued interest — when she turns 18. A parent can withdraw money from the account on behalf of the child before the child turns 18, but only for important educational or medical needs of a child, and only with a court order. To access the money on behalf of her child, a parent would normally seek the judge’s approval, and then present a signed court order to the bank to make whatever withdrawals the judge has approved. (We at Michaels & Smolak have also set up countless court-protected bank accounts like this one for injured children).