District Of Columbia 2025-2026 Regular Session

District Of Columbia Council Bill B26-0056 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 2025”
10	10
11	11	Today I am introducing the Settlement of Actions Involving Minor Children Act of 2025.
12	12	This bill was first introduced in Council Period 25. The legislation eliminates the mandatory
13	13	guardianship system for minor child settlements in favor of an investment framework that will
14	14	prevent costly annual guardianship reports that consume the 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. In the
21	21	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
31	31	The value of this bill is that it enables approaches to minor child settlements that are less
32	32	costly and therefore reserve more of the settlement for the child’s ultimate benefit.
33	33	1
34	34	___________________________ 1
35	35	Chairman Phil Mendelson 2
36	36	3
37	37	4
38	38	5
39	39	6
40	40	7
41	41	A BILL 8
42	42	____________ 9
43	43	10
44	44	IN THE COUNCIL OF THE DISTRICT OF COLUMBIA 11
45	45	_________________ 12
46	46	13
47	47	14
48	48	To amend Title 21 of the District of Columbia Official Code to protect settlements awarded to 15
49	49	minor children in civil actions by requiring court approval of net settlements of $10,000 16
50	50	or more, provide for court discretion of guardianship appointments, provide details for 17
51	51	resolution payments, provide for author ization of investments of certain proceed s, and 18
52	52	require court approval of certain withdrawals. 19
53	53	20
54	54	BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this 21
55	55	act may be cited as the “ Settlement of Actions Involving Minor Children Act of 2025.” 22
56	56	Sec. 2. Chapter 1 of Title 21 of the District of Columbia Official Code is amended as 23
57	57	follows: 24
58	58	(a) The table of contents is amended as follows: 25
59	59	(1) Strike the sentence “21-120. Settlement of actions involving minor 26
60	60	children; appointment of guardian of estate.” and insert the sentence “21-120. 27
61	61	Settlement of actions involving minor children; court approval for certain 28
62	62	amounts and payments.” in its place. 29
63	63	(2) Add new section designations to read as follows: 30
64	64	“21-121. Bond not required; deposit or investment of proceeds of appointing check. 31
65	65	“21-122. Court order required for withdrawal. 32
66	66	“21-123. Petition to court for withdrawal.”. 33 2
67	67	(b) Section 21- 120 is amended as follows: 34
68	68	(1) The heading is amended to read as follows: 35
69	69	“§21-120. Settlement of actions involving minor children; court approval required for certain 36
70	70	amounts; payment of claim on behalf of minors.”. 37
71	71	(2) Subsection (a) is amended to read as follows: 38
72	72	“(a) A person entitled to maintain or defend an action on behalf of a minor child, 39
73	73	including an action relating to real estate, is competent to settle an action so brought and, upon 40
74	74	settlement thereof or upon satisfaction of a judgment obtained therein, is competent to give a full 41
75	75	acquittance and release of all liability in connection with the action, but if the net value of the 42
76	76	money and property due to the minor is $10,000 or more , such a settlement is not valid unless 43
77	77	approved by a judge of the court in which the action is pending.”. 44
78	78	(3) Subsection (b) is repealed. 45
79	79	(4) New subsections (c), (d), and (e) are added to read as follows: 46
80	80	“(c)(1) Unless a court appoints a guardian of the property of a minor under subsection 47
81	81	(d) of this section, if a minor or any other person in whose name a claim in tort is made or 48
82	82	judgment in tort obtained on behalf of a minor recovers a net sum of less than $10,000, the 49
83	83	person responsible for the payment of that sum shall make payment for the benefit of the minor 50
84	84	by check made to the order of “ ________________ [name of trustee] trustee under Title 21 of 51
85	85	the District of Columbia Official Code for ___________________ [name of minor], minor”. If a 52
86	86	party seeks the approval of the court in which the action is pending, the court may authorize: 53
87	87	“(A) The funding of a structured settlement on behalf of the minor; 54
88	88	“(B) The creation and/or funding of a special needs trust for the benefit of 55
89	89	the minor; 56 3
90	90	“(C) The participation and/or funding of a pooled trust for the benefit of 57
91	91	the minor; or 58
92	92	“(D) Any other trust or fiduciary arrangement that the c ourt deems in the 59
93	93	best interest of the minor. 60
94	94	“(2) Unless a court appoints a guardian of the property of a minor under 61
95	95	subsection (d) of this section, if a minor or any other person in whose name a claim in tort is 62
96	96	made or judgment in tort obtained on behalf of a minor recovers a net sum of $10,000 or more, 63
97	97	the person responsible for the payment of that sum shall make payment for the benefit of the 64
98	98	minor by check made to the order of “________________ [name of trustee] , trustee under Title 65
99	99	21 of the District of Columbia Official Code for ___________________ [name of minor], 66
100	100	minor” except the court may authorize: 67
101	101	“(A) The funding of a structured settlement on behalf of the minor; 68
102	102	“(B) The creation and/or funding of a special needs trust for the benefit of 69
103	103	the minor; 70
104	104	“(C) The participation and/or funding of a pooled trust for the benefit of 71
105	105	the minor; or 72
106	106	“(D) Any other trust or fiduciary arrangement that the c ourt deems in the 73
107	107	best interest of the minor. 74
108	108	“(3) No other act is necessary to constitute the person named as trustee pursuant 75
109	109	to paragraph (1) or paragraph (2) of this subsection. 76
110	110	“(d)(1) In accordance with the procedures for the appointment of a guardian under this 77
111	111	section, the court may appoint a guardian of the property of a minor on whose behalf a recovery 78 4
112	112	in tort is sought or has been obtained if the court determines that the appointment would be in the 79
113	113	best interest of the minor. 80
114	114	“(2) The petition for guardianship may be made by an interested person or a 81
115	115	trustee designated under this title or under subsection (c) of this section. 82
116	116	“(e) If a court appoints a guardian of the property of a minor under subsection (d) of this 83
117	117	section or a guardian has already been appointed and the minor or any other person in whose 84
118	118	name a claim in tort is made or judgment in tort obtained on behalf of the minor, the person 85
119	119	responsible for the payment of that sum shall make payment for the benefit of the minor by 86
120	120	check made to the order of “__________ (name of guardian), guardian under Title 21 of the 87
121	121	District of Columbia Official Code for ______________ (name of minor), minor” except the 88
122	122	court may authorize: 89
123	123	(1) “The funding of a structured settlement on behalf of the minor; 90
124	124	(2) “The creation and/or funding of a special needs trust for the benefit of the minor ; 91
125	125	(3) “The participation and/or funding of a pooled trust for the benefit of the minor; or 92
126	126	(4) “Any other trust or fiduciary arrangement that the court deems in the best interest 93
127	127	of the minor”. 94
128	128	A new section 21- 121 is added to read as follows: 95
129	129	“§ 21- 121. Bond not required; deposit or investment of proceeds of appointing check. 96
130	130	“(a) The trustee need not give bond. 97
131	131	“(b)(1) Except as otherwise approved by the c ourt pursuant to §21- 120 (c)(1)(A) 98
132	132	through (c)(1)(D) or (c)(2) (A) through (c)(2)(D), a trustee who receives a check under §21-99
133	133	120(c)(1) or (c)(2) shall: 100
134	134	“(A) Deposit the check in any financial institution. Financial institution means: 101 5
135	135	i. Depository institution, as defined in the Federal Deposit Insurance 102
136	136	Act under 12 U.S.C. § 1813(c); or 103
137	137	ii. Federal credit union or State credit union, as defined in the Federal 104
138	138	Credit Union Act under 12 U.S.C. § 1752; 105
139	139	“(B) If the trustee deposits the check in a financial institution under subparagraph 106
140	140	(A) of this paragraph , the trustee may direct the financial institution to invest or reinvest the 107
141	141	proceeds of the check in a certificate of deposit or other interest -bearing account. 108
142	142	“(2) Except as otherwise approved by the c ourt pursuant to §21- 120(c)(1)(A) 109
143	143	through (c)(1)(D) or §21- 12(c)(2)(A) through (c)(2)(D ), deposits may be made in one or more 110
144	144	accounts in a financial institution under paragraph (1)(A ) of this subsection, provided that the 111
145	145	amount deposited in any account or institution shall not exceed the amount to which accounts 112
146	146	are insured.”. 113
147	147	(c) A new section 21-122 is added to read as follows: 114
148	148	“§ 21- 122. C ourt order required for withdrawal. 115
149	149	“(a) Except on the order of the c ourt, the financial institution specified in §21-116
150	150	121(b)(1)(A) may not allow the withdrawal of any of the money except to pay it to the minor on 117
151	151	the minor’s attainment of the age of 18 years or to pay to the personal representative of the 118
152	152	minor’s estate on the death of the minor before the minor’s attaining the age of 18 years. 119
153	153	“(b) Payment, without the need of a court order, shall be made to the minor on or after the 120
154	154	minor’s 18
155	155	th
156	156	birthday, upon presentation of a valid government identification. 121
157	157	“(c) Payment by any institution or association in accordance with an order of the court, or 122
158	158	to the minor on or after the minor’s 18th birthday, or to the personal representative after the death 123 6
159	159	of the minor, is a complete discharge of liability of the institution or association for the money 124
160	160	paid.”. 125
161	161	(d) A new section 21- 123 is added to read as follows: 126
162	162	“§21-123. Petition to court for withdrawal. 127
163	163	“(a) A trustee shall file a petition for withdrawal of any of the money of the minor in the 128
164	164	Superior Court of the District of Columbia. 129
165	165	“(b) 130
166	166	“(1) The petition shall be verified and state in detail the purposes for which the 131
167	167	withdrawal of the money is desired. 132
168	168	“(2) On receiving a petition, the court shall make any inquiry necessary before 133
169	169	granting or denying the petition in whole or in part. 134
170	170	“(c) If money is desired for any purpose other than to pay for medical expenses of the 135
171	171	minor, or to further the education of the minor, including reasonable expenditures for room and 136
172	172	board, the court shall require a strong showing of necessity by the trustee in a hearing. 137
173	173	“(d) If the trustee dies or is discharged, a petition filed under this section shall include a 138
174	174	prayer for the appointment of another trustee. 139
175	175	“(e) In its order on a petition, the court may direct the institution where the funds of the 140
176	176	minor are on deposit to make its check to the order of: 141
177	177	“(1) The trustee for the use of the minor; or 142
178	178	“(2) The person, firm, or organization which has performed or is to perform a 143
179	179	service for or furnish goods to the minor. 144 7
180	180	“(f) The court also may direct payment of a reasonable fee for an attorney and the costs of 145
181	181	the proceedings, but may not in any event direct or provide for the payment of any fees or 146
182	182	commissions to the trustee.”. 147
183	183	Sec. 3. Fiscal impact statement. 148
184	184	The Council adopts the fiscal impact statement in the committee report as the fiscal 149
185	185	impact statement required by section 4a of the General Legislative Procedures Act of 1975, 150
186	186	approved October 16, 2006 (120 Stat. 2038; D.C. Official Code § 1-301.47a). 151
187	187	Sec. 4. Effective date. 152
188	188	This act shall take effect following approval of the Mayor (or in the event of veto by the 153
189	189	Mayor, action by the Council to override the veto), and a 30 -day period of congressional review 154
190	190	as provided in section 602(c)(1) of the District of Columbia Home Rule Act, approved December 155
191	191	24, 1973 (87 Stat. 813; D.C. Official Code § 1- 206.02(c)(1)). 156