When Probate Court is Necessary for a Personal Injury Case

Personal injury cases and probate matters are often viewed as distinct areas of law. However, there are situations where a Colorado probate attorney’s expertise is essential in handling a personal injury case. As part of our broader Understanding Probate in Colorado content, this article explains why probate involvement is important when a personal injury claim results in a settlement for someone who cannot manage their own finances legally.

You may think of probate court as a process that only comes into play when an estate needs to be settled after someone passes away. However, under Colorado probate law, the court intervenes in certain personal injury cases, specifically when the injured person is a minor or is unable to manage their own settlement funds. To ensure the injured party’s best interests, the probate court oversees: 

• the approval, 

• protection, and 

• distribution of the settlement money. 

How Colorado Handles Injury Settlements for Minors Under 18

In Colorado, anyone under the age of 18 is a minor, which introduces unique legal requirements in personal injury cases. If a child receives monetary damages, such as from an auto accident,  there may be additional steps or legal obstacles to collecting and managing those funds on the child’s behalf. 

Colorado sets the age of majority at 18 (C.R.S. 13-22-101), meaning that once a person turns 18, they can enter into contracts, make medical decisions, and file lawsuits.

An experienced personal injury attorney will tell you that if you can hold off collecting your child’s settlement money until after his or her 18th birthday, your child will be able to collect their settlement money without probate court involvement. When your child is under the age of 18, it’s a different story.

Example 1: A 6-Year-Old is Awarded $25,000 After a Dog Bite

A neighbor’s dog attacks a 6-year-old, and the child receives a $25,000 settlement for medical bills, scarring, and pain and suffering. Since the settlement recipient is a minor, neither the child nor the parents can immediately receive the money. Instead, the court may require a conservatorship, restricted account, or other protections to ensure the funds are preserved for the child’s benefit.

Even though the child won’t reach the age of majority until 18, specific statutes could still extend additional protections until age 21, depending on the type of claim and the governing law.

Example 2: A 17-Year-Old is Injured in a Car Accident

A 17-year-old who is injured in a car crash receives a settlement shortly before turning 18. Since they will reach the age of majority within months, the process is more straightforward: the funds generally become fully accessible once they turn 18.

However, if the teen wanted to file a lawsuit instead of accepting a settlement, Colorado would give them two years after turning 18 to bring the claim. 

It’s understandable to question how waiting years to receive money is supposed to help your child, who requires immediate support for their recovery. The purpose of delaying a child’s settlement funds is to protect their long-term financial interests. Colorado law requires court oversight to ensure that the money is handled responsibly, invested safely, and preserved for the child’s future needs. 

In many cases, parents can access a portion of the settlement to cover medical bills or other necessary expenses. However, the remainder of the funds is safeguarded until the child turns 18. This process helps prevent misuse, ensures fair compensation is not undervalued, and ultimately provides long-term security for the injured child’s care and recovery.

In Colorado, when a child receives a personal injury settlement of more than $10,000, the funds must be protected and managed under the probate court’s supervision. For very large and complex settlements, a conservatorship may be necessary. However, the most common option for personal injury settlements is establishing a restricted account for the child to be supervised by the probate court. Here are the key steps parents or guardians should expect:

1. Notify the Court

Any settlement involving a minor must be disclosed to the court, even if the case never reached litigation. This process ensures that the amount is fair and that the child’s interests are protected.

2. Get Probate Approval

Colorado courts typically require probate court approval for settlements involving minors—especially when the amount is substantial. The court reviews the settlement, attorney fees, and proposed plan for managing the funds.

3. Open a Restricted Account

Once the probate court approves the settlement money, the next step is to find a bank that offers a restricted account. The restricted account prevents a parent or guardian from withdrawing the money unless there’s a valid reason for it. For larger and more complex settlements, the court may require a full conservatorship, which would include a more case-specific plan for monitoring the funds. 

4. File Annual Disclosures

After opening the restricted account, you must report the account’s balance to the court every year and demonstrate that the money is intact. You are required to continue this reporting each year for as long as the Court orders.

5. Request Permission for Withdrawals

Our personal injury attorneys have seen parents request to withdraw money from the account to cover expenses such as school tuition and transportation. But you must seek the court’s permission to withdraw money from the account. You’ll have to write a letter seeking approval before you spend the child’s money on any of these things.

6. Release Funds

Eighteen is the age of majority in Colorado, and courts may release funds to the child once they reach that age. However, courts have the authority to extend supervision beyond that age. It is not uncommon for courts to require that personal injury settlements for minors remain restricted until the child turns 21, especially if there are other existing conservatorships or guardianships involving the child.

Parents often want to know if they can place a child’s settlement money from an accident into an investment account instead of a checking account. A trust account, for instance, can accrue more interest than a regular bank account. So the answer is yes.

 While courts recognize the benefits of savings and investment accounts, the judge will want to know whether the account will be restricted. When you appear before the probate court, be sure to have the necessary documentation with you.

Some settlements are small enough that they do not justify the cost of continued court supervision, although there is still a need for court approval of the personal injury settlement agreement. Although there is no magic number, in practice, many personal injury settlements for minors involving less than $10,000 do not use the probate court’s supervision of the money after approval of the settlement agreement. In this instance, parents will receive the funds on behalf of their child and attest to using it in the best interest of the child. Keep in mind that Colorado law (C.R.S. §§ 15‑14‑412, 15‑14‑425) still allows the court to hold fiduciaries accountable for misuse of protected funds even if court supervision is not used

Failing to follow Colorado’s probate requirements for a minor’s personal injury settlement can create serious problems down the road. Here are the key risks of skipping probate for a child’s personal injury settlement:

Delayed Access to Funds

If the settlement isn’t properly approved and placed in a restricted account, the court may delay releasing the funds. This delay can stall college plans, housing needs, or other major life expenses.

Legal Penalties for Improper Use

Parents or guardians who spend or commingle the child’s settlement money without court authorization may face legal consequences, including sanctions or removal as conservator.

Court Refusing to Release Funds

If the settlement was never formally approved or you don’t file annual reports about the use of the funds, the court can refuse to release any more money until you take these steps. You may be required to attend additional hearings or submit supplemental documentation.

Possible Requirement to Repay Money

If an adult misuses any portion of a child’s personal injury settlement, the court can require them to repay the funds in full, plus interest and, in some cases, attorney fees.

Settlement Agreements May be Void

Additionally, a settlement completed without court approval may be voidable at a later date. If the minor or another interested party claims the funds were mishandled, the settlement could be challenged in court, requiring reopening or reallocation of funds.

Most parents aren’t prepared for the probate requirements that follow their child’s personal injury settlement. Our experienced probate attorneys will ensure you comply with Colorado’s fiduciary requirements and court-mandated reporting. Schedule your case assessment online today. Let our Probate Team simplify the legal process so you can focus on what matters most: your child’s recovery.

Personal injury settlements for minors require probate court approval in Colorado to protect the minor’s interests. Because minors cannot legally make binding financial decisions, the court steps in to ensure the settlement is fair, properly managed, and used for the child’s benefit.

A minor’s settlement is court-protected until age 21 (or sooner if the court deems it appropriate). Larger settlements typically require a conservator or hold the funds in a restricted account, whereas smaller ones (under $10,000) may be managed by a parent. Some settlements are placed in locked annuities. Once the case is closed, any remaining funds are released directly to the child. 

A probate judge approves a minor’s settlement only if it is fair and in the child’s best interest. They review the settlement amount, future medical or care needs, attorney fees, and liens, and decide how the money should be protected—often through a restricted account or conservator.

To obtain probate court approval for a minor’s settlement in Colorado, you must submit a petition with key details about the minor, guardians, claims, damages, and any insurance involved. A written settlement agreement and mandatory court forms must be included. Notice must be given to all interested parties, and the court will review the documents to ensure the settlement is fair and in the minor’s best interest. Missing or incomplete information can delay or affect approval.

Parents can access a minor’s settlement funds for medical or educational needs through court-approved procedures. Small settlements (typically under $10,000 annually) can be placed in a custodial account or managed by a parent or guardian for the child’s care, education, and welfare. Larger or more complex settlements typically require probate court approval or the appointment of a conservator to oversee the funds.