Minor Settlements in Michigan: MCR 2.420 Court Approval (2026)
When a child is injured in Michigan, the case does not end with a handshake and a check. Every settlement for a minor must be approved by a judge under MCR 2.420, and settlements above $5,000 trigger probate-court conservatorship requirements. Parents who skip these steps risk an unenforceable release — and insurers know it.
Why Children’s Settlements Are Different
A minor cannot contract, cannot sue in their own name, and cannot validly release a legal claim. Michigan solves this with three interlocking mechanisms: a next friend appointed under MCR 2.201(E) to prosecute the claim, judicial review of any settlement under MCR 2.420, and probate oversight of the money through a conservator when the recovery is large enough. Each protects the same interest — the child’s, not the parents’ and not the insurer’s.
The Fairness Hearing
The judge’s job at the approval hearing is substantive, not ceremonial. In a personal-injury settlement, the injured minor must ordinarily appear before the court unless excused for good cause, and the judge may require medical testimony in court or by deposition. Expect the court to ask about the severity and permanency of the injuries, the liability risks that justify the number, the attorney fee being charged, and how the net proceeds will be protected until the child turns 18.
The $5,000 Line: Conservator or Direct Payment
Where the money goes after approval depends on its size:
| Net Payment to Minor | Required Mechanism | Authority |
|---|---|---|
| $5,000 or less per year | May be paid for the minor’s benefit without a conservator — commonly to a parent or guardian | MCL 700.5102 |
| More than $5,000 immediately, or installments exceeding $5,000 in any year of minority | Probate court must appoint a conservator before judgment enters; bond sufficiency verified in writing | MCR 2.420(B)(4); EPIC |
| Any amount where a conservator already exists | Probate court reviews the settlement even below $5,000 | MCR 2.420; EPIC |
The circuit judge cannot enter the judgment until written verification arrives that the probate court has passed on the sufficiency of the conservator’s bond. Structured settlements and restricted accounts are common tools to satisfy the court that funds will stay intact until majority.
Conflicts of Interest
If the next friend, guardian, or conservator has a conflict — for example, a parent who was driving at the time of the crash and faces a potential claim themselves — the court must appoint a lawyer guardian ad litem for the child. This comes up more often than families expect, and it is far better addressed at the start of the case than at the approval hearing.
The Deadlines: Minority Tolling Is Generous, PIP Is Not
Michigan’s saving statute, MCL 600.5851, tolls the ordinary three-year limitations period of MCL 600.5805(2) during minority: an injured child generally has until their 19th birthday to file a tort claim. But the no-fault deadlines are far less forgiving. The one-year-back rule of MCL 500.3145 governs recovery of unpaid PIP benefits, and waiting also lets witnesses scatter and surveillance footage vanish. Tolling preserves the right to sue; it does not preserve the evidence — a point we make at length in our guides on PIP deadlines and the firm’s personal injury practice.
Wrongful Death Distributions to Minors
When a minor receives a distribution from a wrongful-death settlement under MCL 600.2922, MCR 2.420 applies as well, layered on top of the Wrongful Death Act’s own court-approval and distribution procedure. The combination means two levels of judicial scrutiny — fairness of the global settlement and fairness of the child’s share.
What the Approval Hearing Looks Like in Practice
Families are often anxious about the court appearance, and almost always relieved by how it actually goes. The hearing is short — usually 15 to 30 minutes. Counsel files a motion describing the accident, the injuries, the medical course, the total settlement, the fee and costs, and the proposed disposition of the net proceeds. The judge reviews the file in advance, asks the next friend a handful of questions, may briefly address the child, and confirms that everyone understands what is being released. Where the injury is significant or the prognosis uncertain, judges can and do require an updated medical narrative or a physician’s deposition before approving.
Structured Settlements and Restricted Accounts
For larger recoveries, courts frequently favor structured settlements: annuity payments timed to adulthood — often staged at 18, 21, and 25 — rather than a lump sum landing on a teenager’s 18th birthday. Restricted bank accounts, which require a probate order for any withdrawal during minority, are the standard tool for mid-sized recoveries. Both reduce the bond a conservator must post and give the approving judge confidence the money will still exist when the child reaches majority.
Attorney Fees on Minors’ Claims
Fee agreements in minors’ cases get their own judicial review. The court examines the contingency percentage against the work actually performed and the result obtained, and may adjust a fee it finds unreasonable — protection that exists in addition to the general reasonableness requirement of MRPC 1.5. Costs advanced are itemized and reviewed the same way. Parents should expect transparency here; it is the system working as designed.
Common Mistakes That Delay or Derail Approval
Most approval hearings go smoothly. The ones that do not usually involve a preventable error made months earlier:
- Settling before the prognosis is known. Judges scrutinize early settlements of injuries that may have lasting effects. A growth-plate fracture or head injury in a young child often warrants waiting for a mature medical picture — or a settlement structured to account for the uncertainty.
- Ignoring the conservatorship timeline. The probate appointment and bond verification must be in place before the circuit judge can enter judgment. Starting the probate filing only after the settlement is reached adds weeks; running the two tracks in parallel avoids the stall.
- Treating the PIP claim casually. In auto cases, the child’s no-fault file — attendant care provided by parents, replacement services, mileage — is its own stream of benefits with its own deadlines, separate from the tort settlement being approved.
- Releasing future claims too broadly. Release language drafted by carriers sometimes sweeps in claims the family never intended to surrender. The approval hearing is the moment to put the release’s actual scope on the record.
- Overlooking liens. Health-plan liens, Medicaid recovery, and provider balances must be resolved or reserved; a judge asked to approve “net proceeds to the minor” will want to know the liens are handled.
Each of these is routine for counsel who regularly handle minors’ claims and a costly surprise for those who do not. The court-approval system works best when it confirms careful work rather than exposing its absence.
Frequently Asked Questions
Can I settle my child’s injury claim directly with the insurance company?
You can negotiate, but no settlement of a minor’s claim is enforceable in Michigan without court approval under MCR 2.420. An insurer that pays without approval risks paying twice, which is why legitimate carriers insist on the hearing.
Does my child have to come to court?
In personal-injury settlements, yes — the injured minor must appear before the judge unless excused for good cause. The appearance is usually brief.
Who keeps the settlement money?
Not the parents. Amounts over $5,000 go to a bonded conservator or into a court-restricted arrangement for the child’s benefit until age 18. Smaller annual amounts may be handled under MCL 700.5102.
How long does my child have to sue?
The three-year clock of MCL 600.5805(2) is tolled during minority by MCL 600.5851, generally giving the child until their 19th birthday for the tort claim. No-fault PIP deadlines, including the one-year-back rule, are not extended the same way and require prompt action.
What does the judge look at when approving a settlement?
Fairness: the strength of liability, the medical picture and prognosis, the reasonableness of attorney fees and costs, and the plan for protecting the net proceeds during minority.
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