New York City Infant Compromise Attorney

Why an Infant Compromise Is Required in New York

Under CPLR 1207 and CPLR 1208, no settlement of a personal injury claim on behalf of an infant (a person under 18) or an incapacitated adult can be finalized without court approval. The reason is straightforward: minors and incapacitated persons cannot legally contract for themselves, and the court stands as the guardian of their interests. Even if the parents are perfectly consistent with the injured child's welfare, they cannot, on their own, bind the child to a release. An infant compromise proceeding is the mechanism the law uses to make sure the settlement is fair, the attorney's fees are reasonable, and the funds are protected until the child reaches majority.

What Goes Into the Petition

The infant compromise petition is a detailed application that must satisfy specific statutory requirements. It typically includes:

• An affidavit from the parent or guardian describing the circumstances of the accident, the injuries suffered, the medical treatment received, and the current condition of the infant.
• An affirmation from the attorney representing the infant, describing the investigation, the negotiations, the proposed settlement, and the requested attorney's fee.
• Medical records and physician reports establishing the nature and extent of the injuries.
• Photographs documenting visible injuries.
• An itemization of liens and reimbursement claims, including Medicaid, Medicare, ERISA plans, no-fault insurance, and workers' compensation.
• An itemization of disbursements and litigation costs.
• A proposed order setting out the terms of the settlement, the distribution of the funds, and any structured settlement arrangements.

The Court Hearing and What the Judge Asks

In most counties, the judge holds an in-person or remote conference with the infant, the parent or guardian, and counsel. The judge asks the infant (where age-appropriate) about how they are doing and may ask the parent about the child's medical progress. The judge reviews the medical records, the proposed settlement, the requested attorney's fee, and the proposed allocation of the funds. The judge may approve the settlement as proposed, approve it with modifications, or, in rare cases, decline to approve it if the terms are not in the infant's best interests.

How Settlement Funds Are Protected for a Minor

Once the settlement is approved, the funds belonging to the infant cannot simply be handed to the parent. New York provides several ways to safeguard the money:

• Court-ordered bank deposit. The funds are deposited into an interest-bearing account in the infant's name and cannot be withdrawn without further court order. The funds are released to the child when they turn 18.
• Structured settlement annuity. The defendant or its insurer purchases an annuity from a qualified life insurance company. The annuity pays the child a stream of payments, often starting at age 18 and continuing for many years, sometimes for life. The income is generally tax-free under Internal Revenue Code Section 104(a)(2).
• Supplemental Needs Trust (SNT). Where the infant is or will be receiving means-tested government benefits such as Medicaid or SSI, an SNT preserves eligibility by holding the settlement funds in trust for the child's supplemental needs without counting as a resource.
• Guardian's account. For limited and specific purposes, a guardian may be permitted to manage funds for the infant's benefit, subject to ongoing court supervision.

Structured Settlements in Depth

Structured settlements offer several advantages over a lump sum bank deposit. The annuity grows on a tax-deferred basis, the periodic payments are tax-free, and the structure can be for fund specific milestones such as college tuition payments, a down payment on a home, or lifetime medical needs. The structured settlement broker works with the attorney to design payment streams that match the child's expected needs. Once the annuity is purchased and the settlement is approved, the payment stream is locked in. That predictability is a major benefit but also requires careful design at the outset.

Special Needs Trusts and Medicaid Eligibility

For infants and disabled persons who receive Medicaid, SSI, or other means-tested benefits, a lump-sum settlement can disqualify them from those benefits overnight. A first-party Special Needs Trust under 42 USC §1396p(d)(4)(A) is the standard solution. The trust holds the settlement proceeds for the sole benefit of the disabled individual, allows the trustee to pay for goods and services not covered by government benefits, and preserves eligibility throughout the beneficiary's life. The trust must be properly drafted, approved by the court as part of the infant compromise, and administered in accordance with Social Security Administration and state Medicaid rules. We have drafted scores of these trusts that have been accepted by New York Surrogate's Courts, Supreme Courts, the NYC HRA, and county Departments of Social Services.

Guardianship Proceedings for Disabled Adults

When a person turns 18, their parents lose the legal authority to make decisions for them, even if the person has significant cognitive or developmental disabilities. To settle a personal injury case for a disabled adult, a guardian must be appointed under Article 17-A of the Surrogate's Court Procedure Act (for developmental disabilities) or Article 81 of the Mental Hygiene Law (for incapacitated adults more generally). The guardianship proceeding can run concurrently with the infant compromise to avoid delays.

Medicaid Liens and Other Reimbursement Claims

Personal injury settlements are subject to a web of reimbursement claims. The state Medicaid agency has a statutory lien for medical assistance paid in connection with the injury. Medicare has its own conditional payment claim. Private health insurers may have ERISA-based subrogation rights. Workers' compensation carriers have liens under WCL Section 29. Each of these claims must be identified, audited, negotiated where possible, and resolved before the settlement is distributed. We routinely negotiate substantial reductions to these liens, which puts more money in the infant's pocket.

Why Personal Injury Firms Bring Us In

Many personal injury firms have outstanding trial lawyers but limited experience with the post-settlement compliance work. We partner with personal injury attorneys to handle the infant compromise, draft and obtain approval of the Special Needs Trust, secure guardianship orders for adult clients, and negotiate down the liens. The personal injury firm continues to receive the agreed contingent fee, and the client receives a coordinated, fully compliant settlement.

Counties Where We Handle Infant Compromise Proceedings

We handle infant compromise proceedings in New York County, Kings County, Queens County, Bronx County, Richmond County, Nassau County, Suffolk County, and Westchester County. Each county has its own administrative practices for infant compromise applications, including local forms, preferred order language, and judge-specific preferences. Familiarity with those local practices saves time and avoids needless adjournments.

Timing of an Infant Compromise

From the time the parties agree on a settlement to the day the funds are paid out, an infant compromise typically takes between two and four months. The drafting of the petition, the gathering of medical records, and the lien negotiations are the slowest parts. Once the petition is filed, most courts schedule the compromise hearing within four to eight weeks. Funds are usually paid by the defendant within thirty days of the signed order.

Call Our Office

If you are a personal injury attorney needing infant compromise support, or a family with an injured child or disabled relative looking at a settlement, call the Law Offices of Albert Goodwin at (212) 233-1233 or email [email protected].