District Of Columbia 2023-2024 Regular Session

District Of Columbia Council Bill B25-0821 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2	OFFICE OF CHAIRMAN PHIL MENDELSON
3	3	COUNCIL OF THE DISTRICT OF COLUMBIA
4	4
5	5
6	6	Statement of Introduction
7	7
8	8
9	9	“Settlement of Actions Involving Minor Children Act of 2024”
10	10
11	11	Today I am introducing the Settlement of Actions Involving Minor Children Act of 2024.
12	12	This bill eliminates the mandatory guardianship system for minor child settlements in favor of an
13	13	investment framework that will prevent costly annual guardianship reports which consume the
14	14	proceeds of the child’s settlement.
15	15
16	16	Under this legislation, judicial review is required in settlements with a net recovery of
17	17	$10,000 or more. In all settlements (under and over $10,000), the settlement proceed check will
18	18	be made payable to a trustee on behalf of the child. These checks must be deposited into a blocked
19	19	account at a financial institution, and the child is unable to withdraw the funds (with certain
20	20	exceptions for medical expenses and education) until he or she reaches the age of 18 years old. In
21	21	the alternative, the representative of the child may ask the judge to approve a different financial
22	22	situation (other than a blocked account) such as a structured settlement, pooled trust, special needs
23	23	trust, or another fiduciary arrangement in the best interest of the child. While court approval of
24	24	cases with a net recovery under $10,000 is not required, if the representative of the child prefers
25	25	to deposit the funds in an account other than a blocked account, the representative must seek court
26	26	approval to authorize the alternative financial plan.
27	27
28	28	The bill also maintains judicial discretion to order a guardianship when it is in the best
29	29	interest of the child.
30	30	1
31	31	___________________________ 1
32	32	Chairman Phil Mendelson 2
33	33	3
34	34	4
35	35	5
36	36	6
37	37	7
38	38	A BILL 8
39	39	____________ 9
40	40	10
41	41	IN THE COUNCIL OF THE DISTRICT OF COLUMBIA 11
42	42	_________________ 12
43	43	13
44	44	14
45	45	To amend Title 21 of the District of Columbia Official Code to protect settlements awarded to 15
46	46	minor children in civil actions by requiring court approval of net settlements of $10,000 16
47	47	or more, provide for court discretion of guardianship appointments, provide details for 17
48	48	resolution payments, provide for authorization of investments of certain proceeds, and 18
49	49	require court approval of certain withdrawals. 19
50	50	20
51	51	BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this 21
52	52	act may be cited as the “Settlement of Actions Involving Minor Children Act of 2024.” 22
53	53	Sec. 2. Chapter 1 of Title 21 of the District of Columbia Official Code is amended as 23
54	54	follows: 24
55	55	(a) The table of contents is amended as follows: 25
56	56	(1) Strike the sentence “21-120. Settlement of actions involving minor 26
57	57	children; appointment of guardian of estate.” and insert the sentence “21-120. 27
58	58	Settlement of actions involving minor children; court approval for certain 28
59	59	amounts and payments.” in its place. 29
60	60	(2) Add new section designations to read as follows: 30
61	61	“21-121. Bond not required; deposit or investment of proceeds of appointing check. 31
62	62	“21-122. Court order required for withdrawal. 32
63	63	“21-123. Petition to court for withdrawal.”. 33 2
64	64	(b) Section 21-120 is amended as follows: 34
65	65	(1) The heading is amended to read as follows: 35
66	66	“§21-120. Settlement of actions involving minor children; court approval required for certain 36
67	67	amounts; payment of claim on behalf of minors.”. 37
68	68	(2) Subsection (a) is amended to read as follows: 38
69	69	“(a) A person entitled to maintain or defend an action on behalf of a minor child, 39
70	70	including an action relating to real estate, is competent to settle an action so brought and, upon 40
71	71	settlement thereof or upon satisfaction of a judgment obtained therein, is competent to give a full 41
72	72	acquittance and release of all liability in connection with the action, but if the net value of the 42
73	73	money and property due to the minor is $10,000 or more, such a settlement is not valid unless 43
74	74	approved by a judge of the court in which the action is pending.”. 44
75	75	(3) Subsection (b) is repealed. 45
76	76	(4) New subsections (c), (d), and (e) are added to read as follows: 46
77	77	“(c)(1) Unless a court appoints a guardian of the property of a minor under subsection 47
78	78	(d) of this section, if a minor or any other person in whose name a claim in tort is made or 48
79	79	judgment in tort obtained on behalf of a minor recovers a net sum of less than $10,000, the 49
80	80	person responsible for the payment of that sum shall make payment for the benefit of the minor 50
81	81	by check made to the order of “ ________________ [name of trustee] trustee under Title 21 of 51
82	82	the District of Columbia Official Code for ___________________ [name of minor], minor”. If a 52
83	83	party seeks the approval of the court in which the action is pending, the court may authorize: 53
84	84	“(A) The funding of a structured settlement on behalf of the minor; 54
85	85	“(B) The creation and/or funding of a special needs trust for the benefit of 55
86	86	the minor; 56 3
87	87	“(C) The participation and/or funding of a pooled trust for the benefit of 57
88	88	the minor; or 58
89	89	“(D) Any other trust or fiduciary arrangement that the court deems in the 59
90	90	best interest of the minor. 60
91	91	“(2) Unless a court appoints a guardian of the property of a minor under 61
92	92	subsection (d) of this section, if a minor or any other person in whose name a claim in tort is 62
93	93	made or judgment in tort obtained on behalf of a minor recovers a net sum of $10,000 or more, 63
94	94	the person responsible for the payment of that sum shall make payment for the benefit of the 64
95	95	minor by check made to the order of “________________ [name of trustee], trustee under Title 65
96	96	21 of the District of Columbia Official Code for ___________________ [name of minor], 66
97	97	minor” except the court may authorize: 67
98	98	“(A) The funding of a structured settlement on behalf of the minor; 68
99	99	“(B) The creation and/or funding of a special needs trust for the benefit of 69
100	100	the minor; 70
101	101	“(C) The participation and/or funding of a pooled trust for the benefit of 71
102	102	the minor; or 72
103	103	“(D) Any other trust or fiduciary arrangement that the court deems in the 73
104	104	best interest of the minor. 74
105	105	“(3) No other act is necessary to constitute the person named as trustee pursuant 75
106	106	to paragraph (1) or paragraph (2) of this subsection. 76
107	107	“(d)(1) In accordance with the procedures for the appointment of a guardian under this 77
108	108	section, the court may appoint a guardian of the property of a minor on whose behalf a recovery 78 4
109	109	in tort is sought or has been obtained if the court determines that the appointment would be in the 79
110	110	best interest of the minor. 80
111	111	“(2) The petition for guardianship may be made by an interested person or a 81
112	112	trustee designated under this title or under subsection (c) of this section. 82
113	113	“(e) If a court appoints a guardian of the property of a minor under subsection (d) of this 83
114	114	section or a guardian has already been appointed and the minor or any other person in whose 84
115	115	name a claim in tort is made or judgment in tort obtained on behalf of the minor, the person 85
116	116	responsible for the payment of that sum shall make payment for the benefit of the minor by 86
117	117	check made to the order of “__________ (name of guardian), guardian under Title 21 of the 87
118	118	District of Columbia Official Code for ______________ (name of minor), minor” except the 88
119	119	court may authorize: 89
120	120	(1) “The funding of a structured settlement on behalf of the minor; 90
121	121	(2) “The creation and/or funding of a special needs trust for the benefit of the minor; 91
122	122	(3) “The participation and/or funding of a pooled trust for the benefit of the minor; or 92
123	123	(4) “Any other trust or fiduciary arrangement that the court deems in the best interest 93
124	124	of the minor”. 94
125	125	A new section 21-121 is added to read as follows: 95
126	126	“§ 21-121. Bond not required; deposit or investment of proceeds of appointing check. 96
127	127	“(a) The trustee need not give bond. 97
128	128	“(b)(1) Except as otherwise approved by the court pursuant to §21-120 (c)(1)(A) 98
129	129	through (c)(1)(D) or (c)(2)(A) through (c)(2)(D), a trustee who receives a check under §21-99
130	130	120(c)(1) or (c)(2) shall: 100
131	131	“(A) Deposit the check in any financial institution. Financial institution means: 101 5
132	132	i. Depository institution, as defined in the Federal Deposit Insurance 102
133	133	Act under 12 U.S.C. § 1813(c); or 103
134	134	ii. Federal credit union or State credit union, as defined in the Federal 104
135	135	Credit Union Act under 12 U.S.C. § 1752; 105
136	136	“(B) If the trustee deposits the check in a financial institution under subparagraph 106
137	137	(A) of this paragraph, the trustee may direct the financial institution to invest or reinvest the 107
138	138	proceeds of the check in a certificate of deposit or other interest-bearing account. 108
139	139	“(2) Except as otherwise approved by the court pursuant to §21-120(c)(1)(A) 109
140	140	through (c)(1)(D) or §21-12(c)(2)(A) through (c)(2)(D), deposits may be made in one or more 110
141	141	accounts in a financial institution under paragraph (1)(A) of this subsection, provided that the 111
142	142	amount deposited in any account or institution shall not exceed the amount to which accounts 112
143	143	are insured.”. 113
144	144	(c) A new section 21-122 is added to read as follows: 114
145	145	“§ 21-122. Court order required for withdrawal. 115
146	146	“(a) Except on the order of the court, the financial institution specified in §21-116
147	147	121(b)(1)(A) may not allow the withdrawal of any of the money except to pay it to the minor on 117
148	148	the minor’s attainment of the age of 18 years or to pay to the personal representative of the 118
149	149	minor’s estate on the death of the minor before the minor’s attaining the age of 18 years. 119
150	150	“(b) Payment, without the need of a court order, shall be made to the minor on or after the 120
151	151	minor’s 18
152	152	th
153	153	birthday, upon presentation of a valid government identification. 121
154	154	“(c) Payment by any institution or association in accordance with an order of the court, or 122
155	155	to the minor on or after the minor’s 18th birthday, or to the personal representative after the death 123 6
156	156	of the minor, is a complete discharge of liability of the institution or association for the money 124
157	157	paid.”. 125
158	158	(d) A new section 21-123 is added to read as follows: 126
159	159	“§21-123. Petition to court for withdrawal. 127
160	160	“(a) A trustee shall file a petition for withdrawal of any of the money of the minor in the 128
161	161	Superior Court of the District of Columbia. 129
162	162	“(b) 130
163	163	“(1) The petition shall be verified and state in detail the purposes for which the 131
164	164	withdrawal of the money is desired. 132
165	165	“(2) On receiving a petition, the court shall make any inquiry necessary before 133
166	166	granting or denying the petition in whole or in part. 134
167	167	“(c) If money is desired for any purpose other than to pay for medical expenses of the 135
168	168	minor, or to further the education of the minor, including reasonable expenditures for room and 136
169	169	board, the court shall require a strong showing of necessity by the trustee in a hearing. 137
170	170	“(d) If the trustee dies or is discharged, a petition filed under this section shall include a 138
171	171	prayer for the appointment of another trustee. 139
172	172	“(e) In its order on a petition, the court may direct the institution where the funds of the 140
173	173	minor are on deposit to make its check to the order of: 141
174	174	“ (1) The trustee for the use of the minor; or 142
175	175	“(2) The person, firm, or organization which has performed or is to perform a 143
176	176	service for or furnish goods to the minor. 144 7
177	177	“(f) The court also may direct payment of a reasonable fee for an attorney and the costs of 145
178	178	the proceedings, but may not in any event direct or provide for the payment of any fees or 146
179	179	commissions to the trustee.”. 147
180	180	Sec. 3. Fiscal impact statement. 148
181	181	The Council adopts the fiscal impact statement in the committee report as the fiscal 149
182	182	impact statement required by section 4a of the General Legislative Procedures Act of 1975, 150
183	183	approved October 16, 2006 (120 Stat. 2038; D.C. Official Code § 1-301.47a). 151
184	184	Sec. 4. Effective date. 152
185	185	This act shall take effect following approval of the Mayor (or in the event of veto by the 153
186	186	Mayor, action by the Council to override the veto), a 30-day period of congressional review as 154
187	187	provided in section 602(c)(1) of the District of Columbia Home Rule Act, approved December 155
188	188	24, 1973 (87 Stat. 813; D.C. Official Code § 1-206.02(c)(1)), and publication in the District of 156
189	189	Columbia Register. 157