Settlement of Actions Involving Minor Children Act of 2025

OFFICE OF CHAIRMAN PHIL MENDELSON
COUNCIL OF THE DISTRICT OF COLUMBIA

Statement of Introduction

“Settlement of Actions Involving Minor Children Act of 2025”

Today I am introducing the Settlement of Actions Involving Minor Children Act of 2025.
This bill was first introduced in Council Period 25. The legislation eliminates the mandatory
guardianship system for minor child settlements in favor of an investment framework that will
prevent costly annual guardianship reports that consume the proceeds of the child’s settlement.

Under this legislation, judicial review is required in settlements with a net recovery of
$10,000 or more. In all settlements (under and over $10,000), the settlement proceed check will
be made payable to a trustee on behalf of the child. These checks must be deposited into a blocked
account at a financial institution, and the child is unable to withdraw the funds (with certain
exceptions for medical expenses and education) until he or she reaches the age of 18 years. In the
alternative, the representative of the child may ask the judge to approve a different financial
situation (other than a blocked account) such as a structured settlement, pooled trust, special needs
trust, or another fiduciary arrangement in the best interest of the child. While court approval of
cases with a net recovery under $10,000 is not required, if the representative of the child prefers
to deposit the funds in an account other than a blocked account, the representative must seek court
approval to authorize the alternative financial plan.

The bill also maintains judicial discretion to order a guardianship when it is in the best
interest of the child.

The value of this bill is that it enables approaches to minor child settlements that are less
costly and therefore reserve more of the settlement for the child’s ultimate benefit.

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___________________________ 1
Chairman Phil Mendelson 2
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A BILL 8
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IN THE COUNCIL OF THE DISTRICT OF COLUMBIA 11
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To amend Title 21 of the District of Columbia Official Code to protect settlements awarded to 15
minor children in civil actions by requiring court approval of net settlements of $10,000 16
or more, provide for court discretion of guardianship appointments, provide details for 17
resolution payments, provide for authorization of investments of certain proceeds, and 18
require court approval of certain withdrawals. 19
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BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this 21
act may be cited as the “Settlement of Actions Involving Minor Children Act of 2025.” 22
Sec. 2. Chapter 1 of Title 21 of the District of Columbia Official Code is amended as 23
follows: 24
(a) The table of contents is amended as follows: 25
(1) Strike the sentence “21-120. Settlement of actions involving minor 26
children; appointment of guardian of estate.” and insert the sentence “21-120. 27
Settlement of actions involving minor children; court approval for certain 28
amounts and payments.” in its place. 29
(2) Add new section designations to read as follows: 30
“21-121. Bond not required; deposit or investment of proceeds of appointing check. 31
“21-122. Court order required for withdrawal. 32
“21-123. Petition to court for withdrawal.”. 33
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(b) Section 21-120 is amended as follows: 34
(1) The heading is amended to read as follows: 35
Ҥ21-120. Settlement of actions involving minor children; court approval required for certain 36
amounts; payment of claim on behalf of minors.”. 37
(2) Subsection (a) is amended to read as follows: 38
“(a) A person entitled to maintain or defend an action on behalf of a minor child, 39
including an action relating to real estate, is competent to settle an action so brought and, upon 40
settlement thereof or upon satisfaction of a judgment obtained therein, is competent to give a full 41
acquittance and release of all liability in connection with the action, but if the net value of the 42
money and property due to the minor is $10,000 or more, such a settlement is not valid unless 43
approved by a judge of the court in which the action is pending.”. 44
(3) Subsection (b) is repealed. 45
(4) New subsections (c), (d), and (e) are added to read as follows: 46
“(c)(1) Unless a court appoints a guardian of the property of a minor under subsection 47
(d) of this section, if a minor or any other person in whose name a claim in tort is made or 48
judgment in tort obtained on behalf of a minor recovers a net sum of less than $10,000, the 49
person responsible for the payment of that sum shall make payment for the benefit of the minor 50
by check made to the order of “ ________________ [name of trustee] trustee under Title 21 of 51
the District of Columbia Official Code for ___________________ [name of minor], minor”. If a 52
party seeks the approval of the court in which the action is pending, the court may authorize: 53
“(A) The funding of a structured settlement on behalf of the minor; 54
“(B) The creation and/or funding of a special needs trust for the benefit of 55
the minor; 56
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“(C) The participation and/or funding of a pooled trust for the benefit of 57
the minor; or 58
“(D) Any other trust or fiduciary arrangement that the court deems in the 59
best interest of the minor. 60
“(2) Unless a court appoints a guardian of the property of a minor under 61
subsection (d) of this section, if a minor or any other person in whose name a claim in tort is 62
made or judgment in tort obtained on behalf of a minor recovers a net sum of $10,000 or more, 63
the person responsible for the payment of that sum shall make payment for the benefit of the 64
minor by check made to the order of “________________ [name of trustee], trustee under Title 65
21 of the District of Columbia Official Code for ___________________ [name of minor], 66
minor” except the court may authorize: 67
“(A) The funding of a structured settlement on behalf of the minor; 68
“(B) The creation and/or funding of a special needs trust for the benefit of 69
the minor; 70
“(C) The participation and/or funding of a pooled trust for the benefit of 71
the minor; or 72
“(D) Any other trust or fiduciary arrangement that the court deems in the 73
best interest of the minor. 74
“(3) No other act is necessary to constitute the person named as trustee pursuant 75
to paragraph (1) or paragraph (2) of this subsection. 76
“(d)(1) In accordance with the procedures for the appointment of a guardian under this 77
section, the court may appoint a guardian of the property of a minor on whose behalf a recovery 78
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in tort is sought or has been obtained if the court determines that the appointment would be in the 79
best interest of the minor. 80
“(2) The petition for guardianship may be made by an interested person or a 81
trustee designated under this title or under subsection (c) of this section. 82
“(e) If a court appoints a guardian of the property of a minor under subsection (d) of this 83
section or a guardian has already been appointed and the minor or any other person in whose 84
name a claim in tort is made or judgment in tort obtained on behalf of the minor, the person 85
responsible for the payment of that sum shall make payment for the benefit of the minor by 86
check made to the order of “__________ (name of guardian), guardian under Title 21 of the 87
District of Columbia Official Code for ______________ (name of minor), minor” except the 88
court may authorize: 89
(1) “The funding of a structured settlement on behalf of the minor; 90
(2) “The creation and/or funding of a special needs trust for the benefit of the minor; 91
(3) “The participation and/or funding of a pooled trust for the benefit of the minor; or 92
(4) “Any other trust or fiduciary arrangement that the court deems in the best interest 93
of the minor”. 94
A new section 21-121 is added to read as follows: 95
Ҥ 21-121. Bond not required; deposit or investment of proceeds of appointing check. 96
“(a) The trustee need not give bond. 97
“(b)(1) Except as otherwise approved by the court pursuant to §21-120 (c)(1)(A) 98
through (c)(1)(D) or (c)(2)(A) through (c)(2)(D), a trustee who receives a check under §21-99
120(c)(1) or (c)(2) shall: 100
“(A) Deposit the check in any financial institution. Financial institution means: 101
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i. Depository institution, as defined in the Federal Deposit Insurance 102
Act under 12 U.S.C. § 1813(c); or 103
ii. Federal credit union or State credit union, as defined in the Federal 104
Credit Union Act under 12 U.S.C. § 1752; 105
“(B) If the trustee deposits the check in a financial institution under subparagraph 106
(A) of this paragraph, the trustee may direct the financial institution to invest or reinvest the 107
proceeds of the check in a certificate of deposit or other interest-bearing account. 108
“(2) Except as otherwise approved by the court pursuant to §21-120(c)(1)(A) 109
through (c)(1)(D) or §21-12(c)(2)(A) through (c)(2)(D), deposits may be made in one or more 110
accounts in a financial institution under paragraph (1)(A) of this subsection, provided that the 111
amount deposited in any account or institution shall not exceed the amount to which accounts 112
are insured.”. 113
(c) A new section 21-122 is added to read as follows: 114
Ҥ 21-122. Court order required for withdrawal. 115
“(a) Except on the order of the court, the financial institution specified in §21-116
121(b)(1)(A) may not allow the withdrawal of any of the money except to pay it to the minor on 117
the minor’s attainment of the age of 18 years or to pay to the personal representative of the 118
minor’s estate on the death of the minor before the minor’s attaining the age of 18 years. 119
“(b) Payment, without the need of a court order, shall be made to the minor on or after the 120
minor’s 18th birthday, upon presentation of a valid government identification. 121
“(c) Payment by any institution or association in accordance with an order of the court, or 122
to the minor on or after the minor’s 18th birthday, or to the personal representative after the death 123
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of the minor, is a complete discharge of liability of the institution or association for the money 124
paid.”. 125
(d) A new section 21-123 is added to read as follows: 126
Ҥ21-123. Petition to court for withdrawal. 127
“(a) A trustee shall file a petition for withdrawal of any of the money of the minor in the 128
Superior Court of the District of Columbia. 129
“(b) 130
“(1) The petition shall be verified and state in detail the purposes for which the 131
withdrawal of the money is desired. 132
“(2) On receiving a petition, the court shall make any inquiry necessary before 133
granting or denying the petition in whole or in part. 134
“(c) If money is desired for any purpose other than to pay for medical expenses of the 135
minor, or to further the education of the minor, including reasonable expenditures for room and 136
board, the court shall require a strong showing of necessity by the trustee in a hearing. 137
“(d) If the trustee dies or is discharged, a petition filed under this section shall include a 138
prayer for the appointment of another trustee. 139
“(e) In its order on a petition, the court may direct the institution where the funds of the 140
minor are on deposit to make its check to the order of: 141
“(1) The trustee for the use of the minor; or 142
“(2) The person, firm, or organization which has performed or is to perform a 143
service for or furnish goods to the minor. 144
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“(f) The court also may direct payment of a reasonable fee for an attorney and the costs of 145
the proceedings, but may not in any event direct or provide for the payment of any fees or 146
commissions to the trustee.”. 147
Sec. 3. Fiscal impact statement. 148
The Council adopts the fiscal impact statement in the committee report as the fiscal 149
impact statement required by section 4a of the General Legislative Procedures Act of 1975, 150
approved October 16, 2006 (120 Stat. 2038; D.C. Official Code § 1-301.47a). 151
Sec. 4. Effective date. 152
This act shall take effect following approval of the Mayor (or in the event of veto by the 153
Mayor, action by the Council to override the veto), and a 30-day period of congressional review 154
as provided in section 602(c)(1) of the District of Columbia Home Rule Act, approved December 155
24, 1973 (87 Stat. 813; D.C. Official Code § 1-206.02(c)(1)). 156