By Ralph Burnham, Esq.

The Kentucky General Assembly passed a bill in its 2022 Regular Session which was signed into law by Governor Andy Beshear on April 8, 2022, which will create a new section of the Kentucky Revised Statutes and establishes a new procedure for legal settlements involving minors when the settlement amount is $25,000 or less.

Before House Bill 170 was introduced, passed, and signed, KRS 387.280 was the controlling law for settlement procedures involving minors. Although KRS 387.280 will now be amended to conform to the new procedure, it reads that when a minor or other person under disability, having no guardian or conservator, is entitled to receive a sum not exceeding $10,000, exclusive of interest, in any action in which real estate has been sold, in settlement of any estate, or from any other source, the person having custody of the minor or other person under disability may settle or compromise the dollar amount when in the interest of the minor or other person under disability.

With the passage of House Bill 170, KRS 387.280 will be amended to be exclusively applicable to settlement procedures involving individuals under disability who have reached the age of eighteen and have no guardian or conservator. The $10,000 provision for settlements involving persons under disability will remain unchanged.

According to House Bill 170, a person having legal custody of a minor may settle or compromise and enter into a settlement agreement with a person against whom the minor has a claim if a guardian or conservator has not been appointed for the minor; the total amount of the settlement, not including reimbursement of medical expenses, liens, reasonable attorney fees, and costs, is $25,000 or less; the moneys payable under the settlement agreement will be paid according to the provisions in the bill; and the person entering into the settlement agreement on behalf of the minor completes an affidavit or verified statement that attests that the person has made a reasonable inquiry and to the best of the person’s knowledge, the minor will be fully compensated by the settlement; or there is no practical way to obtain additional amounts from the party entering into the settlement agreement with the minor.

According to Section 55 of the Kentucky Constitution, no act shall become a law until ninety days after the adjournment of the session at which it was passed, except in cases of emergency. House Bill 170 contains an emergency clause that makes it currently effective if it is critically important in uncertain times that minors receive settlement funds without unnecessary delay.

If you would like a copy of House Bill 170 or have any questions regarding this law’s impact on Kentucky settlements involving minors, please contact any member of Reminger’s General Liability/Excess & Surplus Risks Practice Group.

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