Kansas Minor Settlement Statute: $25K Limit and Court Approval

In Kansas, a person with legal custody of a minor can settle a claim on the child’s behalf without court approval when the net proceeds to the minor are $25,000 or less, provided the money is placed in a restricted account or used to buy an annuity and the custodian signs the required affidavit. That streamlined path comes from the Kansas minor settlement statute, K.S.A. 38-152, which took effect through Senate Bill 243 in 2023. Settlements above $25,000, or cases where a guardian or conservator is already in place, go through the district court.

Settling a Claim of $25,000 or Less Without Court Approval

The $25,000 figure is the minor’s net share, calculated after medical expenses, liens, attorney fees, and costs are subtracted. It applies whether the money is paid as a lump sum or used to purchase an annuity.¹

Three conditions have to be met to use this process:

No guardian or conservator has already been appointed for the minor.
The funds are deposited into a restricted account or used to purchase an annuity naming the minor as sole beneficiary.
The person settling on the minor’s behalf signs an affidavit or verified statement attesting that, after reasonable inquiry, the settlement fully compensates the minor (or that there is no practical way to recover more from the other party), and that they understand the obligation to put the money into a restricted account or annuity.¹

If an attorney represents the minor or the custodial parent, that attorney must keep the signed affidavit on file for at least five years. A settlement that meets these requirements binds the minor, carries the same legal effect as if the minor were a competent adult, and releases the claims it covers. Insurers and financial institutions can rely on the agreement in place of a court order when transferring funds or opening accounts.¹

Where the Settlement Money Has to Go

Kansas does not permit a settlement check for a minor to be handed to a parent to deposit as they see fit. The statute controls the path the money takes, and the path depends on whether an attorney is involved.

When an attorney represents the minor or the custodial parent, the funds first move through the attorney’s trust account. From there, the attorney either deposits the money into a restricted savings or investment account that blocks withdrawals, or uses it to purchase an annuity with the minor as sole beneficiary.¹

When no attorney is involved, the paying party writes the check or sends the electronic transfer directly to the restricted account or the annuity issuer. The money never passes through the custodial parent’s personal bank account.²

If the minor is in state custody under the Kansas Department for Children and Families, the secretary must establish a restricted trust account or subaccount that earns interest for the minor’s benefit.¹

When the Funds Can Be Withdrawn

Money in a restricted account cannot be withdrawn, paid out, or transferred to anyone, including the minor, except in three situations:

A judge enters a court order authorizing a withdrawal for a specific purpose.
The minor reaches 18, Kansas’s age of majority, and gains full access.
A conservator is later appointed and accesses the funds under court supervision.

The age of majority in Kansas is 18, with one exception: a married individual aged 16 or older is treated as an adult for contracts and property matters.³ An insurer or other payer who transfers funds into a restricted account or to an annuity issuer in good faith is shielded from liability for how the money is handled afterward.¹

When Court Approval Is Required

The no-court process has clear limits. Court involvement becomes necessary when:

The net proceeds to the minor exceed $25,000. Anything above that figure falls outside K.S.A. 38-152 and typically goes through a conservatorship proceeding.
A guardian or conservator has already been appointed. If someone is already managing the minor’s affairs under court authority, the settlement must go through the court.
Someone wants the extra protection of a judge’s sign-off. Even for qualifying settlements, the minor or anyone acting on their behalf may file in district court and ask the judge to approve the settlement terms, the affidavit, and the plan for the funds. Nothing in the statute prevents this optional layer of oversight.²

For larger settlements, the usual route is filing for conservatorship. Anyone acting on behalf of the minor can petition the district court to appoint a conservator, who then oversees the proceeds under ongoing judicial supervision.²

What Court Approval Looks Like

When a minor’s settlement goes through the court, the process begins with a petition filed in the appropriate district court. The petition sets out the settlement terms, the nature of the minor’s claim, and a proposed plan for managing the funds. The judge schedules a hearing to evaluate whether the deal is fair and adequate for the minor.

At the hearing, the court may hear from the custodial parent, the minor’s attorney, and, in complex cases, expert witnesses on the extent of medical or economic damages. The judge weighs whether the settlement genuinely compensates the minor for medical costs, future care needs, and other losses, and can approve, modify, or reject the proposed terms. If the dollar amount is reasonable but the plan for handling the money is not, the court can require changes before approving.

A conservator appointed over settlement proceeds must prepare a plan showing how the funds will be allocated, typically covering medical care, education, and day-to-day needs. That plan is subject to court approval, and the conservator must file regular reports and accountings. If a conservator mismanages funds, the court can intervene, change the arrangement, or replace the conservator.

The 2026 Guardianship and Conservatorship Overhaul

Kansas replaced its guardianship and conservatorship framework on January 1, 2026, when the Kansas Uniform Guardianship, Conservatorship, and Other Protective Arrangements Act (KUGCOPAA) took effect. Enacted through House Bill 2359, the act repealed the prior statutes, including the former K.S.A. 59-3050 and related provisions. Under the new law, the district court retains jurisdiction over conservatorships for any minor domiciled in Kansas or with property in the state, and a “minor” is defined as an unemancipated individual under 18.⁴

Because the KUGCOPAA is newly in force, the specific codified section numbers may still be in the process of being assigned by the Kansas Revisor of Statutes. If you are opening a conservatorship for a minor’s settlement in 2026, confirm the current statute numbers with the Revisor’s office or a Kansas attorney working under the new law.

Using an Annuity Instead of a Restricted Account

Settlement funds can be used to purchase an annuity with the minor as sole beneficiary rather than deposited in a restricted bank account. An annuity pays out set amounts on a fixed schedule, which can carry past the minor’s 18th birthday and provide income over time rather than a single lump sum.

Structured settlement annuities also carry a federal tax advantage. Under 26 U.S.C. § 130, amounts received through a “qualified assignment” of periodic payment obligations for personal physical injury or sickness are excluded from gross income.⁵ To qualify, the periodic payments must be fixed in amount and timing, the recipient cannot accelerate, defer, increase, or decrease them, and the annuity must be issued by a licensed insurance company and purchased within 60 days of the assignment.

Payments arrive tax-free and can be scheduled around milestones such as turning 18, starting college, or reaching 25.

If the Minor Receives Medicaid or SSI

A settlement deposited into a regular restricted account can push a minor over the asset limits for Medicaid or Supplemental Security Income and cause the loss of those benefits. A special needs trust holds settlement funds in a way that does not count as an available resource for benefit eligibility.

A first-party special needs trust, funded with the minor’s own settlement proceeds, must include a Medicaid payback provision: when the beneficiary dies, remaining funds first reimburse the state Medicaid program for benefits paid during the beneficiary’s lifetime. This is a federal requirement under 42 U.S.C. § 1396p, and the beneficiary must be under 65 when the trust is established. A third-party special needs trust, funded by a parent or other family member rather than from the minor’s own assets, does not require a Medicaid payback provision.

Kansas follows the Uniform Trust Code under K.S.A. Chapter 58a, and family members may request a full accounting of how trust funds are spent. One practical point on SSI: trust payments for food no longer reduce SSI benefits as of October 2024, but trust payments for housing expenses such as rent, mortgage, or utilities still reduce SSI by roughly one-third of the federal benefit rate.

Contracts entered into by minors are generally voidable, and a minor can disaffirm a contract within a reasonable time after turning 18 as long as they return any money or property still in their possession.⁶ The affidavit, restricted-account, and conservatorship rules in K.S.A. 38-152 and the KUGCOPAA are what make a minor’s settlement final and enforceable rather than something the minor could challenge years later.

1
Kansas Office of Revisor of Statutes. Kansas Code 38-152 – Settlement Agreement by Person With Legal Custody of a Minor
2
Kansas Legislature. Senate Bill No. 243 – Enrolled
3
Kansas Office of Revisor of Statutes. Kansas Code 38-101 – Period of Minority
4
Kansas Secretary of State. 2025 Session Laws of Kansas Chapter 40 – House Bill 2359
5
Office of the Law Revision Counsel. 26 US Code 130 – Certain Personal Injury Liability Assignments
6
Justia Law. Kansas Statutes 38-102 – Minor Bound by Contracts, When