Structured Settlements for Injured Children

When a child is seriously injured, a settlement can mean the difference between a secure future and a lifetime of financial hardship. Structured settlements are one of the most important tools available to families of injured children in Chicago and throughout Illinois. They turn a lump-sum recovery into a steady stream of payments, timed to meet a child’s needs as they grow. Understanding how they work, what the law requires, and how to get the structure right is essential before you accept any settlement offer. If your child was hurt due to someone else’s negligence, the attorneys at Briskman Briskman & Greenberg, a Chicago personal injury lawyer firm, are ready to help you protect your child’s future.

Table of Contents

• What Is a Structured Settlement and Why Does It Matter for Injured Children?
• Illinois Law and Court Approval of Minor Settlements
• How Structured Settlements Are Structured for Children in Illinois
• What Damages Can Be Included in a Structured Settlement for an Injured Child?
• Why You Need a Lawyer Before Accepting Any Settlement Offer
• FAQs About Structured Settlements for Injured Children in Chicago, IL

What Is a Structured Settlement and Why Does It Matter for Injured Children?

A structured settlement is an agreement where the party at fault, or their insurer, pays compensation in periodic installments rather than one single payment. For adults, a lump sum often makes sense. For children, the math is different. A child injured at a Chicago daycare near Lincoln Park or in the Logan Square neighborhood may face decades of medical treatment, therapy, and lost opportunities. A single payment handed to a parent today may be gone long before the child reaches adulthood.

Structured settlements solve this problem by scheduling payments to match real-life milestones. A family might arrange for monthly payments to cover ongoing medical costs, a larger payment when the child turns 18 for college, and another at 25 when education expenses peak. This kind of planning protects the child from the risk that money will be mismanaged or spent before it is needed most.

Under federal law, specifically Section 130 of the Internal Revenue Code, compensation received through a personal physical injury structured settlement is generally excluded from the recipient’s gross income. That tax advantage makes structured settlements especially valuable for children who will receive payments over many years. The payments grow through an annuity contract, typically issued by a life insurance company, and the child receives the full amount without federal income tax liability on the personal injury portion.

For families in Chicago dealing with the aftermath of a serious daycare injury, a spinal cord injury, a traumatic brain injury, or any other catastrophic harm, structured settlements provide both financial stability and peace of mind. The key is getting the structure right from the start, because once the agreement is approved by the court, the terms are difficult to change.

Illinois Law and Court Approval of Minor Settlements

Illinois law treats minors differently from adults when it comes to settling personal injury claims, and for good reason. A parent does not have the automatic legal authority to settle a child’s claim on the child’s behalf. Under the Illinois Probate Act, 755 ILCS 5/19-8, a parent has no right to settle a minor’s cause of action simply by virtue of the parent-child relationship. Illinois courts have consistently held that court approval is required for any settlement entered into on behalf of a minor to be binding against that child when they reach adulthood.

This means that even if you and the daycare’s insurance company agree on a number, the deal is not done. A petition must be filed with the court. The judge reviews whether the settlement is fair and whether it genuinely serves the child’s best interests. In Cook County, the Circuit Court of Cook County governs this process, and local rules, including Rules 6.4, 6.5, and 12.15, provide specific procedures for finalizing settlements involving minors. Families near the Daley Center in downtown Chicago are likely to have their petitions heard there.

The court may also appoint a Guardian Ad Litem, a person whose sole job is to represent the child’s interests, not the parents’ interests, not the attorney’s interests, and certainly not the insurance company’s interests. The Guardian Ad Litem reviews the proposed settlement, investigates the circumstances of the injury, and gives the court a recommendation. Only after the judge is satisfied that the settlement is fair will an order be entered approving it.

Once approved, the settlement funds paid to a minor are typically placed with a court-appointed guardian of the estate, who must be bonded to protect the assets. The Illinois Probate Act at 755 ILCS 5/11-5 also provides that if a minor is 14 years of age or older, they may nominate their own guardian. This entire process exists to protect children, and it works best when families have experienced legal representation from the very beginning.

How Structured Settlements Are Structured for Children in Illinois

Designing a structured settlement for a child requires thinking years, sometimes decades, into the future. The goal is to match payment timing with the child’s anticipated needs. An attorney and a structured settlement consultant work together to build a payment schedule that makes financial sense for the specific child’s situation.

For example, consider a five-year-old injured at an unlicensed daycare in Chicago’s Pilsen neighborhood. The child may need physical therapy for years, special education services, and eventually vocational rehabilitation. A well-designed structured settlement might include monthly payments for ongoing therapy costs from now until age 18, a lump sum at 18 to fund higher education or vocational training, another payment at 25 for independent living expenses, and lifetime monthly payments if the injury results in permanent disability.

The Illinois Structured Settlement Protection Act, found at 215 ILCS 153, governs how structured settlement payment rights can later be transferred or sold. Under this Act, an annuity issuer is defined as an insurer that has issued a contract to fund periodic payments under a structured settlement. The Act also makes clear that dependents, including minor children, are specifically considered when evaluating any proposed transfer of payment rights. No transfer of structured settlement payment rights is effective without prior approval of the circuit court, and that approval is only granted when the court finds the transfer is in the best interest of the payee.

This protection matters because predatory companies sometimes approach structured settlement recipients and offer to buy their future payments at a steep discount. For a child who will not receive those payments for years, the Illinois Structured Settlement Protection Act provides a critical layer of protection against that kind of financial exploitation. Getting the structure right from day one, with qualified legal guidance, is the best way to make sure your child’s recovery stays intact.

What Damages Can Be Included in a Structured Settlement for an Injured Child?

A structured settlement is not a cap on what your child can recover. It is simply the payment method for whatever damages the case supports. In Illinois personal injury cases involving children, recoverable damages can be substantial and wide-ranging.

Medical expenses are the most immediate category. These include emergency room costs, surgeries, hospitalizations, prescription medications, physical therapy, occupational therapy, and speech therapy. For a child who suffered a serious injury at a Chicago daycare, future medical care costs are often the largest single component of a claim. A child who sustains a traumatic brain injury or a spinal cord injury may need medical care for the rest of their life, and those costs must be calculated with the help of medical and economic experts.

Pain and suffering damages compensate the child for the physical pain and emotional distress caused by the injury. Illinois does not cap these damages in most personal injury cases. Emotional distress, including post-traumatic stress disorder, is also recoverable, and therapy and counseling costs fall into their own category of damages.

One of the most significant damage categories for seriously injured children is loss of future earning capacity. If a child’s injuries will limit their ability to work as an adult, Illinois law allows recovery for that lost economic potential. This requires expert testimony from vocational and economic specialists who can project what the child would have earned over a lifetime.

Under Illinois’s modified comparative fault rule, found at 735 ILCS 5/2-1116, a plaintiff can recover damages as long as their own fault does not exceed 50% of the cause of the injury. For young children injured at daycares, contributory fault is rarely a serious issue, but it is worth understanding. The defendant may try to shift blame to reduce their liability, and having strong legal representation protects against those tactics.

In cases involving intentional misconduct or particularly egregious negligence, such as physical abuse by a daycare worker, punitive damages may also be available under Illinois law. These damages go beyond compensation and are meant to punish the wrongdoer and deter similar conduct.

Why You Need a Lawyer Before Accepting Any Settlement Offer

Insurance companies move fast after a child is injured. Their goal is to close the claim quickly and cheaply. They may approach a family within days of the incident with a settlement offer that sounds significant but falls far short of what the child actually needs over a lifetime. Once a settlement is signed and approved by the court, it is extremely difficult to reopen the case, even if the child’s condition turns out to be worse than initially understood.

This is why having a lawyer before any settlement discussions begin is so important. An experienced Chicago personal injury attorney can identify all responsible parties, whether that is the daycare operator, the property owner, a negligent staff member, or a product manufacturer whose defective equipment caused the harm. Cases involving inadequate supervision, understaffing, or failure to conduct background checks on workers often involve multiple defendants, and each one may share responsibility for what happened to your child.

A lawyer also works with medical experts, child development specialists, and economic analysts to build a full picture of your child’s damages. That picture is what drives the value of the case. Without it, families often accept far less than their child deserves. The attorneys at Briskman Briskman & Greenberg have represented injured children and their families throughout the Chicago area, from the North Shore to the South Side, and they understand what it takes to build a case that reflects the true cost of a child’s injury.

Timing also matters. Illinois has a statute of limitations for personal injury claims, and while the Illinois Code of Civil Procedure provides tolling provisions for minors, those protections are not unlimited. Waiting too long can jeopardize your child’s right to recover. If your child was injured at a daycare, a preschool, a nursery school, or any other childcare setting in Chicago, contact Briskman Briskman & Greenberg at (312) 222-0010 to discuss your options. There is no cost to speak with an attorney, and protecting your child’s future starts with that first conversation.

FAQs About Structured Settlements for Injured Children in Chicago, IL

Does a judge have to approve a structured settlement for my child in Illinois?

Yes. Under the Illinois Probate Act, 755 ILCS 5/19-8, a parent cannot legally settle a minor’s personal injury claim without court approval. Even if both sides agree on the terms, the settlement must be presented to a judge who will review it to make sure it genuinely serves the child’s best interests. In Cook County, this process follows specific local rules of the Circuit Court. The court may also appoint a Guardian Ad Litem to independently evaluate the settlement on the child’s behalf before the judge enters an approval order.

Are structured settlement payments tax-free for my child?

Generally, yes. Under Section 130 of the Internal Revenue Code, compensation received through a structured settlement for a personal physical injury is excluded from federal gross income. This means your child will not owe federal income tax on the payments they receive as part of a properly structured personal injury settlement. This tax advantage is one of the primary reasons structured settlements are recommended for injured children, since payments may continue for decades. You should consult a tax professional for advice specific to your situation, as tax laws can change.

Can the structured settlement payments be changed after the court approves the settlement?

Modifying a structured settlement after court approval is very difficult. The payment schedule is locked in once the annuity contract is issued and the court enters its order. Under the Illinois Structured Settlement Protection Act, 215 ILCS 153, any transfer or sale of future payment rights requires a separate court approval process, and the court will only approve such a transfer if it finds the transaction is in the best interest of the payee. This is why it is so important to get the payment structure right from the beginning, with input from legal counsel and a qualified structured settlement consultant.

What if the daycare’s insurance company offers us a quick settlement right after the injury?

Do not accept any settlement offer without first speaking to an attorney. Insurance companies often make early offers that seem reasonable but do not account for long-term medical costs, future therapy, loss of earning capacity, or the full extent of your child’s pain and suffering. Once a settlement is approved by the court, the case is closed. If your child’s condition worsens or new medical needs emerge, you generally cannot go back and ask for more. Call Briskman Briskman & Greenberg at (312) 222-0010 before responding to any offer from an insurance company.

How long does it take to finalize a structured settlement for a child in Illinois?

The timeline varies depending on the complexity of the case, the severity of the child’s injuries, and how long it takes to reach an agreement with the responsible parties. Cases involving serious injuries, such as traumatic brain injuries or permanent disabilities, often take longer because it takes time to fully understand the child’s long-term medical needs. After a settlement amount is agreed upon, the court approval process in Cook County adds additional time, including the preparation of a petition, a possible Guardian Ad Litem investigation, and a court hearing. Most families should expect the full process to take several months to over a year from the date of injury to final court approval.

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This content was prepared by Briskman Briskman & Greenberg, 351 W. Hubbard Street, Suite 810, Chicago, IL 60654. Phone: (312) 222-0010. This page is for general informational purposes only and does not constitute legal advice. Reading this page does not create an attorney-client relationship. Results in any case depend on the specific facts and circumstances involved, and past results do not guarantee similar outcomes in future cases.

More Resources About Compensation and Damages in Daycare Injury Cases

• Medical Expenses Recoverable in Chicago Daycare Injury Claims
• Future Medical Care Costs for Children Injured at Daycare
• Pain and Suffering Damages for Children Injured at Daycare
• Emotional Distress and PTSD Damages in Daycare Cases
• Therapy, Counseling, and Mental Health Damages
• Loss of Future Earning Capacity for Severely Injured Children
• Wrongful Death Claims After a Child Dies at a Chicago Daycare
• Punitive Damages in Illinois Daycare Abuse Cases
• How Much Is a Chicago Daycare Injury Case Worth
• Settlement Amounts and Verdicts in Illinois Daycare Cases
• Court Approval of Minor’s Settlements in Illinois