Probate and Minor Settlement Update in Georgia

A newly amended law now increases settlements payable to minor individuals in Georgia. Georgia House Bill 620 amends Title 29, wherein minor settlements have been increased from $15,000 to $25,000, and court approval is no longer required for settlements below $25,000. In addition, the new law specifies "gross settlement" and "net settlement" to clarify whether a conservator is necessary and which court handles minor settlements in specific instances. The new bill was passed by both the House and the Senate and signed by Governor Brian Kemp on May 2, 2022.

The Difference between Gross Settlement and Net Settlement

Gross Settlement: The present value of all amounts paid or to be paid in settlement, including cash, costs of litigation, attorney's fees, and any amounts allocated to a structured settlement or other similar financial arrangements. This term includes the total amount paid or paid by all parties involved in the settlement.

Net Settlement: Gross Settlement minus attorney's fees, costs of litigation, legally enforceable liabilities, the present value of amounts to be given to the minor when they turn 18, and the current value of shares to be put into a trust that the probate court or court where the action is pending approves or creates for the benefit of the minor.

Changes to Georgia Minor Settlements

A. If the gross and net settlement is less than $25,000. 

1. A conservator is not required

2. Court approval is not required.

In this case, the minor’s legal guardian can collect the minor's gross settlement (i.e., the amount paid by an insurance company) and utilize it for the minor's benefit without court approval and going through the process of becoming the court appointed conservator of the child.

B. If the gross settlement is more than $25,000 and the net settlement is less than $25,000

1.   A conservator is not required. 

2. If no legal action is filed, the proposed settlement must be submitted to the probate court for approval.

3. If legal action is filed, the proposed settlement must be submitted to the court where the lawsuit is filed for approval. The probate court's consent is not necessary.

For example, the gross settlement amount is $40,000, and after deducting $12,000 in attorney's costs and $4,000 in medical liens, the minor will get a net settlement of $24,000. The conservator's appointment is not required, but court permission is required.

C. If the gross settlement is more than $25,000, and the net settlement is more than $25,000 

1. A Conservator is required. The parents/guardian cannot seek court approval of a proposed settlement without becoming the minor's qualified legal conservator.

2. If no legal action is filed, the conservator must submit the settlement to the probate court for approval.

3. If legal action is filed, the conservator must submit the settlement to the court where the lawsuit is filed for approval. The probate court's consent in this matter is not required.

For example, the gross settlement amount is $40,000, and after deducting $12,000 in attorney's costs and $1,000 in medical liens, the minor will get a net settlement of $27,000. The appointment of a conservator and court approval is required.

The Benefits of the Amendments

There are positive aspects to the alterations to House Bill 620 in Georgia. The elimination of procedures for court approval and conservatorship in settlements of less than $25,000 frees parents and guardians from the difficulties and burdens associated with the process. It saves a significant amount of time and money, as well as the hassle of paying multiple fees.

Key Takeaways

• Georgia law increased the threshold for certain minor settlements from $15,000 to $25,000, reducing the need for court involvement in smaller settlements.

• Whether court approval or a conservator is required depends on both the gross settlement and the net settlement received by the minor.

• If both the gross and net settlement are less than $25,000, neither court approval nor a conservator is generally required, allowing a natural guardian to receive and manage the funds for the child's benefit.

• When the gross settlement exceeds $25,000, additional court review may be required—even if the net settlement is below $25,000.

• If the net settlement exceeds $25,000, a conservator is generally required before the settlement can be approved.

• Understanding the distinction between gross settlement and net settlement is essential because it determines which legal procedures apply.

Frequently Asked Questions

1. What changed under Georgia House Bill 620?
House Bill 620 increased the threshold for certain minor settlements from $15,000 to $25,000, reducing the need for conservatorships and court approval in qualifying cases. It also clarified how gross settlements and net settlements are calculated for purposes of determining the applicable legal requirements.

2. What is the difference between a gross settlement and a net settlement?
A gross settlement is the total value of the settlement before deductions. A net settlement is the amount remaining after deducting allowable expenses, such as attorney's fees, litigation costs, certain liens, and other authorized deductions under Georgia law.

3. When is a conservator required for a minor's settlement in Georgia?
Generally, if the net settlement exceeds $25,000, a conservator must be appointed before the settlement can be finalized and managed on behalf of the minor.

4. Is court approval always required for a minor's settlement?
No. If both the gross and net settlement amounts are less than $25,000, court approval is generally not required. However, larger settlements may still require approval depending on the settlement amounts and whether litigation has been filed.

5. Why should families consult an attorney regarding a minor's settlement?
Minor settlement laws can be complex, and the applicable requirements depend on the specific facts of each case. An attorney can help determine whether court approval, a conservatorship, or other legal steps are necessary to protect the minor's interests and comply with Georgia law.

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