Can You Use a Child’s Settlement Money for College or Medical Expenses Before Age 18?

Short answer: Possibly — but not automatically. In Iowa, money recovered for a minor (for example, from a personal-injury settlement) generally cannot be spent without court oversight or a court-approved plan. A parent, guardian, or attorney must usually ask the court to approve distributions for specific needs such as medical care or education. This article explains the common ways families can access funds early and the steps the court typically requires.

Detailed Answer — How this works in Iowa

When a child (a legal minor) receives settlement money, courts treat those funds as belonging to the minor. Iowa’s probate and guardianship rules give courts responsibility to protect minor’s funds and to approve settlements, distributions, and use of those funds. The key points are:

Court approval is usually required before a settlement is final and before the child’s money is spent. The court approves the settlement itself and any attorney fees or costs deducted from the recovery.
A parent or guardian cannot automatically take the settlement money and spend it as they wish. The court must be satisfied the proposed use benefits the child.
Court-approved arrangements can include putting money into a blocked or supervised account, establishing a structured settlement (periodic payments), or appointing a conservator/guardian to manage the assets.

To see Iowa’s probate and guardianship laws (which govern how courts handle funds for minors), consult Iowa’s probate statutes: https://www.legis.iowa.gov/law/iowaCode?chapter=633 and the Iowa Judicial Branch guidance on guardianship and conservatorship: https://www.iowacourts.gov/for-the-public/guardianship-and-conservatorship/

Common paths to access funds early

Here are the approaches courts commonly use to allow early access to some or all of a minor’s settlement money:

Court-approved distribution for specific expenses: You can ask the court to approve a one-time or limited release of funds to pay medical bills, ongoing treatment, special educational services, assistive devices, or college costs. The petition must explain why the expense is in the child’s best interests and provide estimates/invoices.
Blocked or supervised bank accounts: The court may order that settlement proceeds be deposited in a blocked or supervised account. The guardian or custodian can request withdrawals for court-approved purposes (medical care, therapy, educational expenses).
Appointment of a conservator/guardian of the estate: If ongoing management is needed, the court can appoint a conservator (sometimes called a guardian of the estate) to manage the funds and petition the court for authority to spend on the child’s needs.
Structured settlement or periodic payments: The parties can arrange payments over time (an annuity). Periodic payments can be structured to cover future tuition or ongoing medical needs without handing a large lump sum to a minor.
Trusts: The court may approve placing funds into a trust for the child, with rules for interim distributions (for education, healthcare, housing). A trust can be tailored to allow access for college or medical costs before the child reaches majority.

What the court looks for

When you ask a court to allow early access to a minor’s settlement funds, judges generally consider:

Whether the requested use is for the child’s benefit (medical care, special education, therapy, or reasonable college costs).
The amount requested relative to the total recovery — courts protect the principal so money will remain for the child’s future needs.
Whether less-intrusive options are available (structured payments, restricted accounts, or trusts).
Documentation supporting the request (bills, cost estimates, expert or provider statements, and a proposed distribution plan).

Who can ask the court?

Typical parties who petition the court include:

The child’s parent or guardian (normally the person who negotiated the settlement).
An attorney for the minor (often a guardian ad litem) who protects the minor’s interests.
A proposed conservator or trustee when ongoing financial management is needed.

Practical steps to request early access (typical process)

Work with the attorney who handled the settlement to prepare a petition to the probate court explaining the proposed disbursement and why it benefits the child.
Gather supporting documents — medical bills, school/college cost estimates, treatment plans, and any expert statements.
File the petition in the appropriate Iowa district court (probate/juvenile docket as directed by local practice).
Serve required notice to interested parties (other parent, insurer, and sometimes the county attorney) and attend the court hearing.
If approved, follow the court’s order precisely — the court will describe how funds must be paid and accounted for.

Helpful Hints

Start early. Court petitions take time; filing before tuition deadlines or treatment start dates reduces surprises.
Document everything. Clear bills, provider statements, and a written plan increase the odds of court approval.
Consider alternatives. Structured settlements, trusts, or supervised accounts can provide money for college or medical needs without risking the whole recovery at once.
Expect the court to approve attorney fees and case costs from the settlement. Those amounts are usually subject to court review.
Local practice varies by county. Check with the county probate clerk or the Iowa Judicial Branch resources for local forms and procedures: https://www.iowacourts.gov/for-the-public/guardianship-and-conservatorship/
Ask whether a guardian ad litem or court-appointed attorney should represent the minor’s interests in the approval process.

Where to look in Iowa law and resources

Iowa probate and guardianship statutes: https://www.legis.iowa.gov/law/iowaCode?chapter=633
Iowa Judicial Branch resources on guardianship and conservatorship (public guidance and forms): https://www.iowacourts.gov/for-the-public/guardianship-and-conservatorship/

Final note and disclaimer: This article explains common procedures under Iowa practice for accessing a minor’s settlement money before age 18, but it is not legal advice. Every case is different. If you are considering asking a court to release a child’s settlement funds, speak with a lawyer licensed in Iowa who handles minors’ settlements, guardianship, or probate matters to get advice tailored to your facts.