Settlement of Minor's Claims Requiring Court Approval Raised from a $15,000 to $25,000 Threshold

Georgia House Bill 620 was overwhelmingly passed by both the House and the Senate and will become law once Governor Kemp signs the Bill (or by operation of law on May 16, 2022). House Bill 620 provides that if the proposed gross settlement of a minor's claim is not more than $25,000.00 and the minor does not have a Conservator, the natural guardian of the minor may compromise and receive payment of the settlement funds (to be held for the benefit of the minor) without becoming the conservator of the minor and without court approval. House Bill 620 also clarifies the calculation of “gross settlement” and “net settlement”.

Gross Settlement

: The present value of all amounts paid or to be paid in settlement including cash, expenses of litigation, attorney’s fees, and any amounts allocated to a structured settlement or other similar financial arrangement. Such term shall include the total amount paid or to be paid on behalf of all settling parties.

Net Settlement

: Gross Settlement reduced by attorney’s fees, expenses of litigation, legally enforceable liens, the present value of amounts to be received by the minor after reaching the age and the present value of amounts to be placed into a trust that the probate court or court in which the action is pending approves or creates for the benefit of the minor.

Settlement Approval Summary

1. Proposed Gross and Net Settlement below $25,000: Conservator appointment and Court approval not required.
2. Proposed Gross Settlement over $25,000 and Net Settlement below $25,000: Conservator not required. Settlement must be submitted for approval to Probate Court (if no legal action pending) or trial court (if legal action pending).

Ex. Gross settlement amount is $50,000 and after subtracting attorney’s fees of $20,000 and medical liens of $6,000, the net settlement to the Minor is $24,000. Appointment of Conservator is not required however, Court approval is required.

3. Proposed Gross Settlement over $25,000 and Net Settlement over $25,000: Conservator required. Conservator must submit Settlement for approval to Probate Court (if no legal action pending) or trial court (if legal action pending).

Ex. Gross settlement amount is $50,000 and after subtracting attorney’s fees of $20,000 and medical liens of $2,000, the net settlement to the Minor is $28,000. Both Appointment of Conservator and Court approval is required.

Full text of House Bill 620 can be found here.