Georgia Minor Settlement Statute: Tiers, Approval, and Conservators

Georgia’s minor settlement statute sorts every case into one of three tiers based on two dollar figures: the gross settlement and the net settlement. If the gross is $25,000 or less, a parent can accept the money without going to court. If the gross exceeds $25,000 but the net is $25,000 or less, a judge must approve the deal but no conservator is needed. If both figures exceed $25,000, the court must approve the settlement and a conservator must be appointed to manage the funds until the child turns 18.¹

The Three Tiers at a Glance

Which tier a case falls into decides everything else: who signs off, who holds the money, and how much paperwork follows.

Gross settlement of $25,000 or less. The natural guardian, usually a parent, can settle the claim and receive the funds without court approval and without being appointed as conservator. The guardian holds and uses the money for the child’s benefit.¹
Gross over $25,000, net of $25,000 or less. The settlement must go to court for approval, but the guardian can still receive and manage the funds afterward. No conservator is required.¹
Both gross and net over $25,000. Court approval is required, and a conservator must be appointed to compromise the claim and manage the funds.¹

Gross vs. Net: Why the Distinction Decides Your Case

Gross is the total value of everything paid, including attorney fees, medical expenses, and any annuity purchases. Net is roughly what remains after subtracting those costs and any payments the child won’t receive until adulthood.

The gap between the two often controls which tier applies. Consider a $40,000 settlement with $18,000 in attorney fees and $5,000 in medical liens. Gross is $40,000, so court approval is required. Net is $17,000, so no conservator is needed. The court reviews the deal, but the parent can still handle the money afterward.

What the Natural Guardian Owes the Child

Under the smallest tier, Georgia law allows a natural guardian to receive a minor’s personal property without becoming a conservator so long as the total value stays at or below $25,000. The tradeoff is legal accountability: the guardian must hold and use the funds for the minor’s benefit.²

No judge is watching, but the duty is real. If a parent spends the money on things unrelated to the child’s needs, the child can pursue a claim against the guardian later. Treat it as the child’s money, not the household’s.

Getting Court Approval

Where the petition goes depends on whether a lawsuit has been filed. If none has, the settlement goes to probate court. If a lawsuit is pending, the court hearing the case has exclusive jurisdiction. A guardian or attorney cannot dismiss the suit and reroute the settlement to probate; the trial court must approve any dismissal first.¹

The judge asks whether the settlement is in the child’s best interest, weighing the severity of the injury, its impact on the child’s life, and anticipated future needs like education and medical care. A number that looks reasonable on paper can be rejected if long-term costs aren’t adequately covered. The court can also appoint a guardian ad litem at any point to represent the child’s interests independently, and often does when financial arrangements are complex or when the parent’s interests may not perfectly align with the child’s.¹

Conservator Appointment and Bond

When the net settlement exceeds $25,000, a conservator must be appointed before the claim can even be compromised. Any person can file the petition, and while the natural guardian often serves in the role, the court can pick someone else if that better serves the child.

Every court-appointed conservator must post a bond with sufficient security, which protects the child’s estate against mismanagement. The bond premium comes out of the settlement itself, which is one more reason the gross-versus-net line matters when you’re mapping a case to the tiers. Banks and trust companies with combined capital, surplus, and undivided profits of $3 million or more are exempt from the bond requirement.³

Managing the Funds After Appointment

The conservator’s job is not just to hold money. Within two months of appointment, the conservator must file an inventory of all the child’s property along with a plan for managing, spending, and distributing those assets. The plan must reflect actual needs, projected expenses, and any proposals to change how assets are titled. If the plan involves spending more than the anticipated income from the child’s property, the court must approve that budget separately.⁴

After that, the conservator files annual returns detailing how funds were managed the prior year, and each return comes with an updated plan. Falling behind can lead to removal and personal liability. Conservators typically invest in low-risk options like savings accounts, certificates of deposit, or government bonds. Selling property or making larger investments requires separate court approval.

What Happens When the Child Turns 18

A minor conservatorship automatically terminates on the child’s 18th birthday, or earlier if the child becomes emancipated. Once it ends, the conservator must deliver all remaining money and property directly to the now-adult former minor.⁵

If the young adult has a disability or another condition that makes managing a large sum difficult, the conservator or another interested person can petition for an adult conservatorship. That petition can be filed up to six months before the 18th birthday, and the adult conservatorship can take effect the same day the minor one ends. For emancipated minors, proof of emancipation must be filed, and the court may hold a hearing before releasing the funds.⁵

Wrongful Death Shares Follow the Same Rules

When a parent’s death gives rise to a wrongful death claim, Georgia divides the recovery equally among the surviving spouse and children, with the spouse guaranteed at least one-third regardless of how many children there are. Without a surviving spouse, the children split the recovery equally.⁶

A child’s share is treated like any other minor settlement. If it clears the $25,000 thresholds, court approval and possibly a conservator are required. With multiple children of different ages, expect the court to look closely at how each share is set up.

Structured Settlements and Special Needs Planning

Structured settlements pay compensation over time rather than in a lump sum. Courts weigh whether the periodic schedule meets both immediate needs and long-term security. The payments are generally tax-free under federal law, and spreading them out reduces the risk that money runs out shortly after the child turns 18.

For a child with a disability, a special needs trust can hold settlement funds without jeopardizing eligibility for Medicaid or Supplemental Security Income. A straightforward conservatorship that hands over a large sum on the 18th birthday can disqualify the young adult from benefits they rely on, so the settlement structure needs to be coordinated with the conservator and any benefits planning from the outset.

Taxes on the Money

Most personal injury settlement proceeds are not taxable. Federal law excludes from gross income any damages received on account of personal physical injuries or physical sickness, whether paid as a lump sum or as periodic payments, and that exclusion applies to children the same way it applies to adults.⁷

Punitive damages are the main exception and are generally taxable. Interest earned on invested settlement funds is also taxable even when the underlying settlement was not. Filing requirements apply to minors on the same income thresholds that apply to adults, which matters once a conservator starts investing a substantial award.⁸

1
Justia. Georgia Code 29-3-3 – Compromise of Claim; Settlement
2
Justia. Georgia Code 29-3-1 – Natural Guardian or Next Friend of Minor; Receiving Personal Property of Minor
3
Justia. Georgia Code 29-3-40 – Bond Required
4
Justia. Georgia Code 29-3-30 – Inventory of Minors Property; Plan for Managing, Expending, and Distributing Minors Property
5
Justia. Georgia Code 29-3-64 – Termination of Conservatorship
6
Justia. Georgia Code 51-4-2 – Wrongful Death of Spouse or Parent
7
Office of the Law Revision Counsel. 26 USC 104 – Compensation for Injuries or Sickness
8
Internal Revenue Service. Tax Implications of Settlements and Judgments