Detailed Answer — How this works in Delaware

If someone settles a legal claim on behalf of a minor (for example, a personal injury settlement), Delaware law and Delaware courts require steps to protect that child’s property. Courts typically will not allow an adult (including a parent) to spend a minor’s settlement freely. Instead the court will approve the settlement and supervise how the funds are handled until the child reaches majority.

Which court and what approval is required?

The exact process depends on the case, the amounts involved, and the relief requested. In Delaware you (usually through an attorney) will ask the appropriate court to approve the compromise of the minor’s claim and to authorize how the settlement funds will be held and spent. The appropriate court may be a family or probate division of the Delaware courts or another court with jurisdiction over the matter. For general Delaware court information see the Delaware Courts site: https://courts.delaware.gov/. For information about guardianships (which often controls a minor’s property), see: https://courts.delaware.gov/family/guardianship/.

Common options courts approve for handling minor settlement funds

• Blocked or restricted bank account: The court orders the bank to hold the funds in an account that cannot be withdrawn without a court order. The guardian or custodian can petition the court to release funds to pay tuition or medical bills.
• Guardianship of property (guardian of the estate): A guardian is appointed to manage the minor’s assets. The guardian must account to the court and can request funds for the minor’s needs, including education and medical care.
• Minor’s trust or education trust: The parties can propose a trust that limits distributions to certain purposes (e.g., education, medical expenses). The court reviews the trust terms and can approve them as part of the settlement order.
• Structured settlement or annuity: Periodic payments can be set up so that funds are paid over time or at specific life events (such as college). Structured settlements are often used for larger awards.
• Direct payment to providers: The court can authorize direct payments from the settlement to schools, colleges, or medical providers rather than paying cash to a parent or guardian.

Typical path to get money for college or medical care before 18

Below is a common sequence of steps you’ll see in Delaware cases:

1. Hire an attorney experienced with minor-compromise settlements.
2. Negotiate the settlement and include proposals for how the funds should be held and used (for example, a proposed trust, restricted account, or guardian arrangement).
3. File a petition asking the court to approve the settlement and the proposed handling of funds. The petition will include the settlement agreement, a statement of why the settlement is fair, and the proposed plan for the money.
4. The court reviews the petition, may hold a hearing, and decides whether to approve the settlement and the funding arrangement.
5. If approved, the court issues an order. If funds are in a blocked account or trust, the order explains who may request funds and for what purposes (for instance, tuition or medical expenses). The guardian or custodian may need to file a motion or accounting before funds are released.

How easy is it to get money released for tuition or medical bills?

Courts commonly allow payment for necessary and reasonable expenses like medical treatment and education. However, you typically must show the court why the payment is in the child’s best interest and how the funds will be used. If the settlement set up a trust or structured arrangement, you must follow those document rules. Expect the court to require receipts, invoices, or a proposed budget before it authorizes a release.

Special situations to consider

• If the minor has a disability and receives public benefits, a properly drafted special needs trust can preserve benefits while allowing access to settlement funds for care.
• Smaller settlements may be easier to place into a custodial account, but courts still supervise where funds belong to a minor.
• Tax and financial aid impacts: distributions can affect financial aid eligibility or tax status. Ask an attorney and a tax advisor before choosing an approach.

Who pays court costs and how long does this take?

Court filing fees, attorney fees, and expenses typically come from the settlement proceeds. The court must ensure fees are reasonable. The timeline varies: for straightforward settlements it can take a few weeks to a few months; more complex matters or objections can take longer.

Where to find Delaware statutes and rules

Delaware’s statutes and court rules are available on the Delaware Code website: https://delcode.delaware.gov/. For procedural forms, guardianship information, and local rules see the Delaware Courts site: https://courts.delaware.gov/ and the Family Court guardianship page: https://courts.delaware.gov/family/guardianship/.

Bottom line

You can arrange for a child’s settlement funds to pay for college or medical expenses before the child turns 18, but you must follow Delaware court procedures. The court will want a plan that protects the child’s future interests. Work with an attorney to draft the settlement language and the trust or account structure, then seek court approval so funds can be released lawfully.

Disclaimer: This article is for general information only and is not legal advice. It does not create an attorney-client relationship. For advice about a specific case, consult a Delaware attorney familiar with minor-compromise settlements and guardianship matters.

Helpful Hints

• Hire an attorney early — courts expect a well-documented petition and a clear plan for the funds.
• Propose specific mechanisms in the settlement (trusts, blocked accounts, structured payments) to increase the chance of court approval.
• If you need money for tuition or medical bills right away, ask the court for interim relief or direct payment to the provider in your petition.
• Keep invoices, school acceptance letters, and medical bills ready when you request disbursements.
• Consider a special needs trust if the child receives government benefits; otherwise distributions may reduce benefits.
• Understand tax and financial-aid consequences before deciding whether to take lump sums, trusts, or annuities.
• Expect court oversight: you will often need to file accountings and motion papers to access funds.
• Use the Delaware Courts website for forms and procedural guidance: https://courts.delaware.gov/