Can I access some of my child’s settlement money before they turn 18? (Alaska)

Short answer: Possibly — but you usually cannot simply spend a child’s settlement money without approval. In Alaska, money awarded or settled on behalf of a minor is often subject to court supervision, custodial rules, or a trust or conservatorship that controls how and when the funds can be used. To get access before the child turns 18 you typically must use an established legal vehicle (court-approved settlement, custodial account/UTMA, trust, or conservatorship) or get a judge’s permission for specific expenses such as medical care or education.

Why this matters

If a settlement resolves a claim belonging to a minor (for example, a personal injury award, insurance payment, or wrongful death distribution), Alaska courts and statutes aim to protect the minor’s money until they reach majority. That protection prevents misuse and preserves benefits (including eligibility for public benefits, where relevant). If money is paid to a parent without the correct legal framework, the parent may be legally accountable and could be required to repay or face court sanctions.

How Alaska law usually treats minor settlements

• Court oversight: When a lawsuit is settled on behalf of a minor, courts often must approve the settlement or the distribution of proceeds. Court approval can include conditions for how much can be withdrawn for specific needs (school, medical care, living expenses) and how the remainder is held until majority.
• Custodial accounts (UTMA/UGMA-style): Many states allow custodial accounts where a custodian manages money for the minor until a statutory age. A custodian can generally use the funds for the minor’s benefit (education, health, maintenance). Check whether Alaska’s custodial-transfer statutes apply and what age triggers termination.
• Trusts: Settlements can be placed into a trust (e.g., a minor’s trust) with a trustee who follows the trust terms and, if necessary, court supervision. Trusts can allow controlled withdrawals for education and medical needs before age 18 (or another age set by the trust).
• Guardianship or conservatorship: If the court appoints a conservator (sometimes called a guardian of the estate) for the minor, that conservator manages the funds and must petition the court for authority to make larger distributions or to use principal for the minor’s benefit.
• Structured settlements/periodic payments: If the settlement is paid over time through an annuity, the payments typically continue to the minor’s representative. Converting or ‘‘factoring’’ future payments usually requires court approval and review to ensure it is in the minor’s best interest.

Common pathways to access funds early for college or medical expenses

Below are common legal approaches parents or guardians use to access a child’s settlement funds before the child turns 18 in Alaska. Each requires documentation and often court notice or approval.

1. Court-approved release or allocation of funds

If the settlement itself is part of a lawsuit or requires court approval, you (or your lawyer) can ask the court to authorize a partial release of funds for specified expenses such as tuition, medical treatment, or other documented needs. The judge will decide whether the requested release is in the child’s best interest.

2. Custodial account (if available)

If the funds are placed into a custodial account under Alaska’s custodial-transfer law (the Uniform Transfers to Minors Act or similar statute if adopted in Alaska), the custodian can make expenditures that are for the minor’s benefit, including education and medical care. The exact rules and the age at which the account terminates vary by state and the type of custodial statute used.

3. Creating a trust with withdrawal provisions

You can place the settlement into a trust that explicitly permits distributions for education and medical expenses. The trust document controls the trustee’s power to make early distributions. If a trust is court‑ordered as part of a minor’s compromise, the court will review the trust terms.

4. Conservatorship/guardian of the estate

If the court appoints a conservator to manage the child’s money, the conservator must follow court rules and often must obtain court permission for major distributions (like paying college tuition). The conservator’s duties include accounting and using funds solely for the minor’s benefit.

Practical steps to seek access for college or medical expenses

1. Determine how the settlement was structured or paid (lump sum, court-ordered compromise, structured settlement, custodial account, or trust).
2. Gather all settlement paperwork, court orders, and account statements.
3. Contact the settlement lawyer, the insurer, or the court clerk to learn whether court approval is required to withdraw funds.
4. If court approval is needed, file a petition (frequently called a petition to approve minor’s compromise, petition for distribution, or petition for withdrawal) explaining the reason (tuition invoice, medical bills) and attaching supporting documents.
5. Ask the judge for an order that either releases a portion of the funds for the stated expenses or appoints a conservator or trustee with specific distribution powers.
6. If public benefits (Medicaid, SSI) are involved, consider a special needs trust so that payments do not jeopardize benefit eligibility.
7. Keep careful records and receipts. A conservator or trustee will need to report distributions to the court.

Tax and benefits considerations

Settlements for physical injuries or medical expenses are often not taxable, but interest earned on settlement funds, punitive damages, or some other categories of recovery may have tax consequences. Also, spending settlement money directly on a child’s needs may affect Medicaid or other government benefits. Before using funds, talk to a tax advisor and benefits specialist.

Where to find Alaska law and court information

• Alaska statutes and legislative information: https://www.akleg.gov/basis/statutes.asp
• Alaska Court System (rules and court contacts): https://www.courts.alaska.gov/

If you want to look for specific statutory language on guardianships, conservatorships, or minor settlements, consult the Alaska statutes on the legislature’s website above or ask the court clerk which statutory provisions and local forms apply to minor-compromise petitions in your judicial district.

Helpful hints

• Don’t assume you can use the money: always verify how the settlement is titled and whether a court order or trustee controls it.
• Keep receipts and proof that any funds you spend were used for the child’s benefit—courts expect accountability.
• For college expenses, present invoices and financial aid offer letters to the court to strengthen a petition for partial distribution.
• If the child receives public benefits, consider a special needs trust to preserve eligibility.
• Structured settlement payments can be inflexible; consult counsel before attempting to change or factor future payments.
• Work with an Alaska attorney experienced in minor settlements, guardianship, trusts, or probate to prepare the petition and required accounting.

Next steps: Gather the settlement documents and invoices for the intended expense, then consult an Alaska lawyer or the court clerk about filing a petition to obtain approval for the withdrawal or to set up the appropriate legal vehicle (trust, custodial account, or conservatorship).

Disclaimer: This article is for general informational purposes only and does not constitute legal advice. Laws and procedures change and may vary with specific facts. For advice about your situation in Alaska, consult a licensed Alaska attorney.