Parents and legal guardians maintain the right to enter into an out-of-court settlement on behalf of their minor children in Nevada personal injury cases. This is known legally as the compromise of a minor’s claim.
Compromises of minors’ claims are governed by section 41.200 of the Nevada Revised Statutes. Under NRS 41.200, a compromise of a minor’s claims is not legally binding unless and until approved by the district court in:
- The county in which the minor resides, or
- If the minor is not a resident of Nevada, in the county where the claim was incurred.1
To help you better understand how to compromise a minor’s claim in Nevada, our Nevada personal injury lawyers will discuss:
- 1. What is a Nevada compromise of a minor’s claim?
- 2. Who can compromise a claim on behalf of a minor?
- 3. Procedure for compromising a minor’s claim in Nevada
- 4. What must be included with the petition to compromise a minor’s claim?
- 5. Who gets the money when a minor’s claim is compromised in Nevada?
- 6. Nevada law requires a blocked trust after a minor’s compromise
- 7. Continuing reporting obligations to the court
- 8. Obtaining money from the blocked trust
- Additional resources
1. What is a Nevada compromise of a minor’s claim?
Compromise of a minor’s claim is a legal term referring to the settlement of a disputed claim for money by or on behalf of an unemancipated minor under the age of 18.
Examples of disputed claims for money include:
- Compensatory damages for injuries sustained in a Las Vegas car accident;
- Medical bills resulting from a traumatic brain injury incurred while playing football;
- Medical bills and costs of replacing equipment damaged in a bicycle accident;
- Lost wages from a summer job your teen cannot do after a slip-and-fall accident at a Las Vegas arcade.
2. Who can compromise a claim on behalf of a minor?
A minor cannot legally be a party to a contract in Nevada.
Nevada law, however, provides for certain types of agreements to become legally binding if they have been approved by a court of competent jurisdiction. Such agreements include out-of-court settlement agreements (“compromises”) with a minor.
The compromise agreement must be entered into on behalf of the minor by:
- Either parent (if the parents live together),
- The custodial parent (if the parents are living separate and apart and custody has been awarded),
- The parent with whom the minor is living (if no custody award has been made), or
- The general guardian or guardian of the estate of the minor (if one has been appointed).
3. Procedure for compromising a minor’s claim in Nevada
A minor’s compromise must be approved
- by the district court in the county where the minor resides or
- if the minor resides outside of Nevada, by the district court in the county in which the accident or injury occurred.
Approval must be obtained by a written petition to the court setting forth:
- The name, age and residence of the minor;
- The circumstances which make the claim a disputed claim for money;
- The name of the third person against whom the claim is made;
- If the claim is the result of an accident, the date, place and facts of the accident;
- The names and residence of the parents or the legal guardian of the minor;
- The name and residence of the person or persons having physical custody or control of the minor;
- The name and residence of the petitioner and the relationship of the petitioner to the minor;
- The total amount of the proceeds of the proposed compromise and the apportionment of those proceeds, including the amount to be used for attorney’s fees, medical expenses and any other expenses;
- Whether such fees and expenses are to be deducted before or after the calculation of any contingency fee paid to the lawyer;
- Whether the petitioner believes the acceptance of this compromise is in the best interest of the minor; and
- That the petitioner has been advised and understands that acceptance of the compromise will bar the minor from seeking further relief from the third person offering the compromise.2
4. What must be included with the petition to compromise a minor’s claim?
If the claim involves a personal injury suffered by the minor, all relevant medical and health care records must be submitted to the court at or before the compromise hearing.
The records must include documentation of:
- The injury, prognosis, treatment and progress of recovery of the minor;
- The amount of medical expenses incurred to date,
- The nature and amount of medical expenses paid and to whom;
- What amount, if any, is owed for medical expenses incurred; and
- An estimate of the amount of medical expenses which may be incurred in the future.3
5. Who gets the money when a minor’s claim is compromised in Nevada?
If the court approves the compromise of the claim of the minor, the court must either:
- Direct the money to be paid to the father, mother or guardian of the minor, with or without the filing of a bond, or
- Require a general guardian or guardian ad litem to be appointed and the money to be paid to the guardian or guardian ad litem, with or without a bond.4
The court will choose whichever option it deems, in its discretion, to be in the best interests of the minor.
6. Nevada law requires a blocked trust after a minor’s compromise
Upon receiving the proceeds of the compromise, the parent or guardian to whom the proceeds are ordered to be paid must establish a blocked financial investment for the benefit of the minor.
By Nevada law, for purposes of a compromise of a minor’s claim, a “blocked financial investment” consists of:
- A savings account established in a depository institution in Nevada,
- A certificate of deposit,
- A United States savings bond,
- A fixed or variable annuity contract, or
- Another reliable investment that is approved by the court.5
7. Continuing reporting obligations to the court
Within 30 days after receiving the proceeds of the compromise, the parent or guardian shall file with the court proof that the blocked financial investment has been established.
If the balance of the investment is more than $10,000, the parent, guardian or person in charge of managing the investment shall annually file with the court a verified report detailing the activities of the investment during the previous 12 months.
If the balance of the investment is $10,000 or less, the court may order the parent, guardian or person in charge of managing the investment to file such periodic verified reports as the court deems appropriate.
The court may hold a hearing on a verified report only if it deems a hearing necessary to receive an explanation of the activities of the investment.6
8. Obtaining money from the blocked trust
The beneficiary of a blocked financial investment may obtain control of or money from the investment:
- By an order of the court which held the compromise hearing; or
- By certification of the court which held the compromise hearing that the beneficiary has reached the age of 18 years. At such time, control of the investment must be transferred to the beneficiary or the investment must be closed and the money distributed to the beneficiary.7
For more in-depth information, refer to these scholarly articles:
- The Theory of the Waiver Scale: An Argument Why Parents Should Be Able to Waive Their Children’s Tort Liability Claims – University of San Francisco Law Review.
- Parental Control of a Minor’s Right to Sue in Federal Court – University of Chicago Law Review.
- The Tort Duty of Parents to Protect Minor Children – Villanova Law Review.
- Constitutional Law – Medical Malpractice Statute Restricting Minor’s Ability to Amend Complain Withstands Equal Protection Challenge – Suffolk University Law Review.
- Who are You to Say What My Best Interest is–Minors Due Process Rights When Admiited by Parents for Inpatient Mental Health Treatment – Washington Law Review.
- NRS 41.200.
- Same. Haley v. Eighth Judicial Dist. Court of Nev., 128 Nev. 171, 273 P.3d 855. Salter v. Moya (Court of Appeals, 2022) 509 P.3d 64.