§ 25-3110.Settlement agreement; custodian of minor; powers; payment; distribution; liability.

Article 31: Structured Settlements Transfers Protection Act and Nebraska Statutory Thresholds for Settlements Involving Minors Act · Last amended 2025 · Last verified July 22, 2026

In one sentenceThis section lets a minor’s custodian settle a claim worth forty thousand dollars or less without a conservator, guardian ad litem, or further court approval, so long as the settlement money goes into a protected account or annuity and the custodian files a good-faith affidavit.

Full Text of § 25-3110

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(1) A person having legal custody of a minor may enter into a settlement agreement with a person against whom the minor has a claim if:

(a) A conservator or guardian ad litem has not been appointed for the minor; (b) The total amount of the claim, not including reimbursement of medical expenses, liens, reasonable attorney's fees and costs of suit, is forty thousand dollars or less if paid in cash, by check, by draft, by direct deposit, or by the purchase of a premium for an annuity;

(c) The money paid under the settlement agreement will be paid as set forth in subsections (3) and (4) of this section; and

(d) 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 that:

(i) To the best of the person's knowledge, the minor will be fully compensated by the settlement; or

(ii) There is no practical way to obtain additional amounts from the party entering into the settlement agreement with the minor.

(2) The attorney representing the person entering into the settlement agreement on behalf of the minor, if any, shall maintain the affidavit or verified statement completed under subdivision (1)(d) of this section in the attorney's file for four years after the minor attains the age of twenty-one years.

(3) The money payable under the settlement agreement shall be paid as follows:

(a) If the minor or person entering into the settlement agreement on behalf of the minor is represented by an attorney and the settlement is paid in cash, by check, by draft, or by direct deposit, then payment shall be made into the attorney's trust account maintained pursuant to the rules of the Supreme Court to be held for the benefit of the minor. The attorney shall timely deposit the money received on behalf of the minor directly into an account established pursuant to the Nebraska Uniform Transfers to Minors Act for the sole benefit of the minor that only allows withdrawals pursuant to subsection (4) of this section and provide notice of the deposit to the minor and the person entering into the settlement agreement on behalf of the minor. Notice shall be delivered by personal service or first-class mail;

(b) If the minor or person entering into the settlement agreement on behalf of the minor is not represented by an attorney and the settlement is paid in cash, by check, by draft, or by direct deposit, then payment shall be made into an account established pursuant to the Nebraska Uniform Transfers to Minors Act for the sole benefit of the minor that only allows withdrawals pursuant to subsection (4) of this section;

(c) If paid by the purchase of a premium for an annuity, then payment shall be by direct payment to the provider of the annuity with the minor designated as the sole beneficiary of the annuity; and

(d) If the minor is a ward of the state and the settlement is paid in cash, by check, by draft, or by direct deposit, then payment shall be made into a trust account, or subaccount of a trust account, established by the Department of Health and Human Services for the purpose of receiving money payable to the ward under the settlement agreement and that earns interest for the benefit of the ward and the department shall provide notice of the deposit to the ward by personal service or first-class mail.

(4) The money in the minor's savings account, trust account, or trust subaccount described in subsection (3) of this section shall not be withdrawn, removed, or paid out or transferred to any person, including the minor, except as follows:

(a) Pursuant to court order;

(b) At the direction of the custodian for the account established pursuant to the Nebraska Uniform Transfers to Minors Act for the sole benefit of the minor;

(d) Upon the minor's death.

(5) If a settlement agreement is entered into in compliance with subsection (1) of this section, the signature of the person entering into the settlement agreement on behalf of the minor is binding on the minor without the need for further court approval or review and has the same force and effect as if the minor were a competent adult entering into the settlement agreement.

(6)(a) A person acting in good faith on behalf of a minor under this section is not liable to the minor for the money paid in settlement or for any other claim arising out of the settlement.

(b) An insurer who in good faith transfers funds at the direction of the settling minor or the minor's representatives into a restrictive savings or other restrictive investment account or to purchase an annuity, shall not be liable to the minor or the minor's representatives for any claims arising from the use of those funds after the transfer is completed.

(c) A financial institution who in good faith opens a restricted savings or other restricted investment account at the direction of the minor or the minor's representatives shall not be liable to the minor or the minor's representatives for any claims arising from the use of such funds.

(7) Any person against whom a minor has a claim that settles the claim with a minor in good faith under this section shall not be liable to the minor for any claims arising from the settlement of the claim.

(8) For the purposes of this section, minor means a person under nineteen years of age.

(9) Nothing in this section shall prevent anyone acting on behalf of the minor from filing for guardianship, limited guardianship, or conservatorship in the appropriate county court and requesting the county court to approve the settlement on behalf of the minor and oversee the settlement proceeds.

Source

Laws 2025, LB341, § 3.

Cross References

Nebraska Uniform Transfers to Minors Act, see section 43-2701.

Plain-English Summary

Section 25-3110 is where the Act’s promised simplification takes shape. A person with legal custody of a minor can settle the minor’s claim without a conservator or guardian ad litem if no conservator or guardian ad litem has already been appointed, the claim totals forty thousand dollars or less — not counting reimbursement of medical expenses, liens, and attorney’s fees and costs — and paid in cash, check, draft, direct deposit, or an annuity premium, the settlement money is paid the way subsections (3) and (4) require, and the custodian signs an affidavit attesting to a reasonable inquiry showing either that the minor will be fully compensated or that there is no practical way to get more from the other side.

Where the money goes depends on how the minor is represented and how the settlement is paid. If an attorney represents the minor’s side and the payment is cash, check, draft, or direct deposit, it goes first into the attorney’s trust account, then promptly into an account under the Nebraska Uniform Transfers to Minors Act held for the minor’s sole benefit. If no attorney is involved, the payment goes straight into that kind of account. An annuity premium is paid directly to the annuity provider with the minor as sole beneficiary, and if the minor is a ward of the state, the money goes into a trust account or subaccount the Department of Health and Human Services maintains for the minor. Once the money is placed, it cannot be withdrawn except by court order, at the direction of the account’s custodian, when the minor turns nineteen, or upon the minor’s death.

A settlement that meets these conditions binds the minor through the custodian’s signature alone, with the same force as if the minor were a competent adult, and without further court approval or review. The section also protects everyone who acts in good faith under it — the custodian, the party settling with the minor, an insurer transferring funds into the restricted account or annuity, and a financial institution opening that account — from liability tied to the settlement. A minor here means anyone under nineteen. Nothing in the section stops a family from choosing a guardianship, limited guardianship, or conservatorship in county court instead, with a judge overseeing the settlement proceeds directly.

Frequently Asked Questions

What dollar amount triggers the simplified custodian settlement process instead of a conservatorship?

Forty thousand dollars or less, not counting reimbursement of medical expenses, liens, and attorney’s fees and costs, paid in cash, check, draft, direct deposit, or an annuity premium.

Does a settlement under this section still need court approval?

No. If the conditions in subsection (1) are met, the custodian’s signature binds the minor without further court approval or review.

Where must settlement money go once it’s paid?

Into an attorney’s trust account and then a Nebraska Uniform Transfers to Minors Act account if the minor is represented; directly into that kind of account if not; to the annuity provider with the minor as sole beneficiary for an annuity; or into a Department of Health and Human Services trust account or subaccount if the minor is a ward of the state.

When can money be withdrawn from the minor’s protected account?

Only by court order, at the direction of the account’s custodian under the Nebraska Uniform Transfers to Minors Act, when the minor turns nineteen, or upon the minor’s death.

What does the custodian have to attest to in the required affidavit?

That the custodian made a reasonable inquiry and, to the best of their knowledge, the minor will be fully compensated by the settlement, or that there is no practical way to obtain more from the other party.

Is anyone protected from liability for settling in good faith under this section?

Yes. The custodian, the party who settled with the minor, an insurer who transfers funds in good faith, and a financial institution that opens the required account in good faith are each shielded from liability tied to the settlement.

Can a family choose a formal guardianship or conservatorship instead?

Yes. Nothing in this section prevents filing for guardianship, limited guardianship, or conservatorship in county court and asking the court to approve and oversee the settlement instead.

Source & verification. Section text and the amendment-history citation are reproduced verbatim from the Nebraska Legislature, Revisor of Statutes, enacted by the Nebraska Legislature. Last verified July 22, 2026. · Official source

Also known as: minor settlement forty thousand dollars nebraskacustodian settle minor claim without court approvaluniform transfers to minors act settlementnebraska minor settlement affidavit requirement