An adjuster offers $9,000 for a broken arm. The parents sign a release, cash the check, and the file closes. Fifteen years later the child, now an adult with a documented growth-plate deformity, sues. And the carrier finds out the release it bought doesn’t do what it thought it did.
Versions of that keep happening. Minnesota’s rule here isn’t a formality, and it isn’t a courtesy to plaintiffs. It’s a validity rule, and it protects the defense at least as much as it protects the child.
What makes an unapproved settlement invalid?
Minn. Stat. § 540.08 governs actions brought on a child’s behalf, and it ends with the sentence that does the work:
No settlement or compromise of the action is valid unless it is approved by a judge of the court in which the action is pending.
(Bold emphasis added.)
The same section sets out who may bring the claim in the first place: “A parent may maintain an action for the injury of a minor son or daughter. A general guardian may maintain an action for an injury to the ward. A guardian of a dependent, neglected, or delinquent child, appointed by a court having jurisdiction, may maintain an action for the injury of the child. If no action is brought by the father or mother, an action for the injury may be brought by a guardian ad litem, either before or after the death of the parent.”
Look at what that says. The claim belongs to the child. The parent is the person allowed to prosecute it. That’s why the parent can’t compromise it alone. You can’t release someone else’s cause of action by signing your own name to a form.
Where the minor is a party to a pending action without a duly appointed representative, Minn. R. Civ. P. 17.02(a) requires a guardian ad litem appointed by the court, who “shall file a consent and oath with the court administrator, and shall give such bond as the court may require.” The application must be made “under oath or penalty of perjury in accordance with Minnesota Statutes, section 358.116,” and must disclose “all facts and circumstances of the adversity or potential adversity of the person whose appointment is sought”. Rule 17.02(c). A parent’s application is heard with or without notice, in the court’s discretion. In all other cases notice is mandatory. Rule 17.02(d).
Does the rule apply if no lawsuit has been filed?
Yes. This is the provision I see missed most often, because the statute alone wouldn’t tell you.
Minn. Gen. R. Prac. 145.01 is written more broadly than § 540.08:
No part of the proceeds of any action or claim for personal injuries on behalf of any minor or incompetent person shall be paid to any person except under written petition to the court and written order of the court as hereinafter provided. This rule governs a claim or action brought by a parent of a minor, by a guardian ad litem or general guardian of a minor or incompetent person, or by the guardian of a dependent, neglected or delinquent child, and applies whether the proceeds of the claim or action have become fixed in amount by a settlement agreement, jury verdict or court findings, and even though the proceeds have been reduced to judgment.
(Bold emphasis added.)
“[A]ction or claim” (emphasis added). The rule reaches the pre-suit demand as squarely as the filed case. Rule 145.02(b) confirms it by requiring the petition to include “[a] brief description of the nature of the claim if a complaint has not been filed” (emphasis added).
So the answer to “we settled it before anyone sued, so approval doesn’t apply” is that the rule was written with that exact situation in mind, and it covers it.
What the judge reads before signing
Rule 145.02 sets what goes in the verified petition: the minor’s name and birth date; the nature of the claim if unfiled; “[a]n attached affidavit, letter or records of a health care provider showing the nature of the injuries, the extent of recovery, and the prognosis” if the court hasn’t already heard that testimony; whether collateral sources cover any part of “the principal and derivative claims, including expenses and attorneys fees,” and whether any subrogation rights have been asserted; and, in structured-settlement cases, “a statement from the parties disclosing the cost of the annuity or structured settlement to the tortfeasor.”
Two of those matter more than the rest.
The collateral-source and subrogation disclosure. Rule 145.02(d) makes the health plan’s lien a required disclosure at the approval stage, not an afterthought. A petition that shows a gross number without accounting for what a subrogated plan intends to take is showing the court a settlement the child won’t receive.
The cost of the annuity, disclosed by the parties, not just the petitioner. The advisory committee comment explains why: “often the tortfeasor will have the only accurate information on this subject.” The court is being asked to compare what the structure costs the defendant with what it’ll pay the child.
Rule 145.04 requires that “[t]he minor or incompetent person and the petitioner shall personally appear before the court at the hearing on the petition” unless the court specifically waives appearance for good cause. The hearing “shall be ex parte unless otherwise ordered.”
Who represents the child at the approval hearing?
Often, nobody the child picked. Rule 145.03 regulates that instead of forbidding it.
If the lawyer presenting the petition “has been retained by the tortfeasor or its insurer,” that lawyer must disclose to the court and to the petitioner “the nature of the representation, how he or she is being paid, the frequency with which the lawyer has been retained by the tortfeasor or insurer, and whether the lawyer is giving legal advice to the petitioner.” Then the rule says something I tell every plaintiff’s lawyer to read twice: “The petition shall not be denied by the court solely because of the petitioner’s representation.”
The safeguard is Rule 145.03(b). The court may refer the petitioner to a lawyer to evaluate the settlement and advise the court in writing whether it’s reasonable. That lawyer “must agree not to represent the petitioner or the minor or accept a referral fee in the event that the petition is denied”, and the opinion “shall not be binding upon the court.” The tortfeasor or insurer pays a reasonable sum for the opinion, with up to half reimbursable from settlement proceeds.
The order controls the money
Rule 145.05 is where the action is, and it’s tighter than most people expect.
The order must approve, modify, or disapprove the settlement and name who gets paid. If the court approves an amount lower than the injuries would suggest, it has to say why. The rule gives “limited insurance coverage, dubious liability, comparative fault or other similar considerations” as examples. Rule 145.05(b).
On fees, there’s a ceiling: “Attorney’s fees will not be allowed in any amount in excess of one-third of the recovery,” subject to a narrow exception that requires both a perfected appeal with a printed brief and “an expenditure of time and effort throughout the proceeding which is substantially disproportionate to a one-third fee.” Rule 145.05(c). The same paragraph restricts reimbursement of investigator expense.
On the balance, the court may authorize investment in United States securities, an annuity or other structured settlement, or a medical assurance agreement, “but otherwise shall order the balance of the proceeds deposited in one or more banks, savings and loan associations or trust companies where the deposits will be fully covered by Federal deposit insurance.” Rule 145.05(d)(1). Where funds are deposited, the order must direct that the defendant pay the financial institution directly, that the account be opened in the child’s name, that the institution acknowledge receipt to the court, that “the financial institution shall not make any disbursement from the deposit except upon order of the court”, and that time deposits mature “on or before the minor’s age of majority.” Rule 145.05(e).
Section 540.08 backs this up on the statutory side. Before a parent receives property from the action, the parent must post a bond the court approves. Instead of a bond, the court may order the proceeds invested in United States securities or deposited in a bank, savings association, trust company, or credit union account, “or an annuity or other form of structured settlement, subject to the order of the court.” And then: “Money or assets in an account established by the court under this section are not available to the minor child or the child’s parent or guardian until released by the court to the child or the child’s parent or guardian” (emphasis added).
Turning eighteen opens nothing
That’s not what people assume. “Minor” means an individual under 18. Minn. Stat. § 645.451, subd. 2. But turning 18 doesn’t open the account.
The 2002 advisory committee comment to Rule 145 puts it flat: “Under the revised rule, release of funds is not automatic when the minor reaches majority; a separate order is required” (emphasis added). Rule 145.05(g) provides that applications for release, “either before or upon the age of majority”, may be made on a form substantially similar to Form 145.2. The deposit is built so the instrument matures at majority (“[i]f automatically renewing instruments of deposit are used, the final renewal period shall be limited to the date of the age of majority”, Rule 145.05(e)(6)), but the money still comes out by court order.
That has a practical consequence for the lawyer who handled the settlement. Somebody has to be able to find the client in ten or fifteen years. The advisory committee thought about requiring the child’s Social Security number on every petition precisely to “make it easier to locate a minor at the time of reaching majority”, and declined on privacy grounds, while noting that “many lawyers will routinely include it in petitions in order to facilitate locating the minor should the need arise.”
Why can a child’s claim reappear a decade later?
Because Minnesota suspends the limitations clock during minority, and the suspension isn’t short.
Minn. Stat. § 541.15(a) provides that listed grounds of disability “existing at the time when a cause of action accrued or arising anytime during the period of limitation, shall suspend the running of the period of limitation until the same is removed; provided that such period, except in the case of infancy, shall not be extended for more than five years, nor in any case for more than one year after the disability ceases” (emphasis added). Clause (1) is “that the plaintiff is within the age of 18 years”.
Read that proviso slowly. It holds two different limits, and infancy is carved out of only one of them. The five-year ceiling on the extension doesn’t apply to minority. The one-year-after-removal limit isn’t carved out. So the extension that comes from minority ends one year after the disability ceases, while the underlying limitations period keeps running on its own terms, and whichever date is later controls. The Minnesota Supreme Court reads it the same way: when a negligence action accrues during a plaintiff’s infancy, the plaintiff “must commence the action either within one year of reaching the age of majority or within the six-year period of limitation, whichever is later.” D.M.S. v. Barber, 645 N.W.2d 383, 387 (Minn. 2002). Not every claim gets the suspension. A dram-shop claim under the Civil Damages Act has its own two-year limit, and the court has held that “the minority tolling statute does not apply to a civil damages action brought by minors.” Whitener ex rel. Miller v. Dahl, 625 N.W.2d 827, 832 (Minn. 2001). That computation should be run against the specific claim and the specific accrual date. The general limitations map is in Minnesota’s civil statutes of limitations, and accrual questions are their own problem; see deadlines that run from a fact.
Medical negligence is different, and a lot shorter. Paragraph (b) provides that in actions “alleging malpractice, error, mistake, or failure to cure, whether based on contract or tort, against a health care provider,” minority “suspends the period of limitation until the disability is removed”, but “[t]he suspension may not be extended for more than seven years, or for more than one year after the disability ceases” (emphasis added). A child injured at birth doesn’t have until age 19 against a hospital.
For defense valuation, the math is simple. A settlement with a young child that was never approved isn’t a closed file. It’s open exposure on a very long fuse, and the plaintiff who eventually shows up is an adult with no reason to honor a document his parents signed.
What the rule cross-references that no longer exists
Here’s a trap for whoever drafts the petition. Rule 145.06(b)(3) requires that the annuity issuer “[h]as complied with the applicable provisions of Minnesota Statutes, sections 549.30 to 549.34”. Sections 549.31 through 549.34 were repealed in 2022. Section 549.30 (definitions) is still there, and the chapter’s current structured-settlement-transfer provisions (registration and surety bond, prohibited practices, required disclosures to the payee, conditions and approval of transfers, and effects of transfer) now sit at §§ 549.35 to 549.39. A petition that recites the rule’s cross-reference word for word is reciting repealed sections. Cite what governs now.
Otherwise, Rule 145.06 puts real conditions on structures. The issuer must be licensed in Minnesota and carry a financial rating “equivalent to A. M. Best Co. A+, Class VIII or better”; if the issuer is related to the settling party or its insurer, a competing quote on comparable terms is required; and the original annuity policy is deposited with the court administrator “without affecting ownership,” to be returned when the minor reaches majority, the policy is fully performed, or the minor dies.
How I paper these
- Get approval even when there’s no suit. Rule 145.01 covers a “claim”. A release signed pre-suit without an order is the exposure, not the resolution.
- Don’t let the carrier’s lawyer paper the petition without the Rule 145.03(a) disclosures. They’re mandatory, and if they’re missing, the court will notice later.
- Sort out the subrogation and collateral-source picture before the hearing, because Rule 145.02(d) makes it part of the petition.
- Draft the deposit paragraphs to match Rule 145.05(e) exactly: direct payment to the institution, account in the child’s name, acknowledgment to the court, no disbursement except by order, maturity at majority.
- Calendar the release. Nothing happens at 18 on its own. Somebody has to file for the order under Rule 145.05(g).
- If the case has a large future-damages piece, look at Minn. Stat. § 549.25 before the hearing. The advisory committee comment to Rule 145.06 ties the two together, and the future-damages mechanism isn’t intuitive.
Who the rule actually protects
Minnesota didn’t make minor settlements harder than adult settlements out of paternalism about children. It made them harder because a minor’s release is worthless without a judge’s approval, and a worthless release is a problem for both sides.
The defendant who insists on the petition, the hearing, the appearance, and the deposit order isn’t being difficult. That defendant is the only one in the room actually buying something. And the plaintiff’s lawyer who treats the approval hearing as paperwork (no medical documentation, no subrogation accounting, no thought about who finds the client at 19) is doing the least valuable part of the file badly.
Madgett Law, LLC handles Minnesota injury claims on behalf of children, including the Minn. Gen. R. Prac. 145 petition, the approval hearing, and the structuring and deposit of proceeds. If your child has been hurt and someone’s asked you to sign a release, don’t sign it before someone explains what a judge has to do first. Send us a message or call 612-470-6529.
Sources: Minn. Stat. § 540.08 (injury to child or ward; suit by parent or guardian — who may maintain the action, guardian ad litem in the absence of a parent action, the bond requirement, the permitted investments and deposits including annuity or structured settlement, the sentence that money in a court-established account “are not available to the minor child or the child’s parent or guardian until released by the court”, and the closing sentence that “No settlement or compromise of the action is valid unless it is approved by a judge of the court in which the action is pending”); Minn. Stat. § 541.15(a) (grounds of disability suspend the running of the limitation period; the five-year proviso and its “except in the case of infancy” carve-out; the one-year-after-removal proviso; clause (1), “that the plaintiff is within the age of 18 years”) and § 541.15(b) (seven-year cap and definition of health care provider for malpractice actions); Minn. Stat. § 645.451, subds. 2–4 (definitions of “minor”, “adult”, and “minority”); Minn. Stat. § 549.25 (future damages; payment — referenced); Minn. Stat. ch. 549, table of sections showing §§ 549.31–549.34 repealed by 2022 c 62 s 32 and §§ 549.30 and 549.35–549.39 in force — Minnesota Office of the Revisor of Statutes, 2025 Minnesota Statutes, at revisor.mn.gov. Minn. Gen. R. Prac. 145.01 (when petition and order are required; “any action or claim”), 145.02 (contents and filing of petition, paragraphs (a)–(e)), 145.03 (representation; the disclosure obligation, the non-denial sentence, the referral procedure and its conditions, and payment for the opinion), 145.04 (hearing; personal appearance; ex parte unless otherwise ordered), 145.05 (terms of the order; the statement-of-reasons requirement, the one-third attorney fee ceiling and its exception, permitted investments, and the deposit directives in paragraph (e) including maturity at majority and the release provision in paragraph (g)), 145.06 (structured settlements; issuer licensing and rating conditions, the related-issuer competitive-quote requirement, deposit and return of the original policy, and the cross-reference to Minn. Stat. §§ 549.30 to 549.34), 145.07 (general guardians), together with the Advisory Committee Comments to the 2000 and 2002 amendments (the derivation of the rule from Minnesota Statutes 1990, § 540.08; the Social Security number discussion; the annuity-cost disclosure rationale; the § 549.25 linkage; and “release of funds is not automatic when the minor reaches majority; a separate order is required”); Minn. R. Civ. P. 17.02 (a)–(d) (representative and guardian ad litem; consent, oath, and bond; application contents under Minn. Stat. § 358.116; discretionary and mandatory notice), as published in Minnesota Court Rules by the Office of the Revisor of Statutes at revisor.mn.gov. D.M.S. v. Barber, 645 N.W.2d 383, 386–87 (Minn. 2002) (under § 541.15(a)(1), when a negligence action accrues during a plaintiff’s infancy, the action must be commenced within one year of reaching the age of majority or within the limitation period, whichever is later); Whitener ex rel. Miller v. Dahl, 625 N.W.2d 827, 832 (Minn. 2001) (minority tolling statute does not apply to a Civil Damages Act claim brought by minors); Minn. Stat. § 340A.802, subd. 2 (two-year limit for actions under § 340A.801). This article is general legal information about Minnesota law, not legal advice, and reading it does not create an attorney–client relationship. Every case depends on its own facts. No outcome is promised or implied.