Rule 2039.Compromise, Settlement, Discontinuance and Distribution.

Adopted February 14, 1939 · Last amended October 3, 1996 · Last verified June 30, 2026

In one sentenceRule 2039 bars compromising, settling, or discontinuing a minor's action without court approval and governs distribution of the proceeds.

Full Text of Rule 2039

Text sizeJump to: (a) (b) (c) (d)

(a) No action to which a minor is a party shall be compromised, settled or discontinued except after approval by the court pursuant to a petition presented by the guardian of the minor.

(b) When a compromise or settlement has been so approved by the court, or when a judgment has been entered upon a verdict or by agreement, the court, upon petition by the guardian or any party to the action, shall make an order approving or disapproving any agreement entered into by the guardian for the payment of counsel fees and other expenses out of the fund created by the compromise, settlement or judgment; or the court may make such order as it deems proper fixing counsel fees and other proper expenses. The balance of the fund shall be paid to a guardian of the estate of the minor qualified to receive the fund, if the minor has one or one is to be appointed. The balance of the fund payable to the guardian of the estate may include a structured settlement underwritten by a financially responsible entity that assumes responsibility for future payments or a trust as described in subdivision (b)(4) of this rule. If the minor has no such guardian and none is to be appointed, the court may order:

(1) an amount not more than twenty-five thousand dollars ($25,000.00) to be paid for the benefit of the minor to the guardian of the person or to the natural guardian or to the person or agency by whom the minor is maintained or to the minor;

(2) any amount in cash of a resident or non-resident minor to be deposited in one or more savings accounts in the name of the minor in banks, building and loan associations, savings and loan associations or credit unions, deposits in which are insured by a Federal governmental agency, provided that the amount deposited in any one such savings institution shall not exceed the amount to which accounts are thus insured, or in one or more accounts in the name of the minor investing only in securities guaranteed by the United States government or a Federal governmental agency managed by responsible financial institutions. Every such order shall contain a provision that no withdrawal can be made from any such account until the minor attains majority, except as authorized by a prior order of the court. Proof of the deposit shall be promptly filed of record;

(3) an agreement be executed providing for a structured settlement underwritten by a financially responsible entity that assumes responsibility for future payments. All moneys paid from the structured settlement during minority shall be paid into a restricted account as provided by subdivision (b)(2) of this rule;

(4) a trust agreement be executed with a corporate fiduciary which is independent from the minor and anyone acting on the minor’s behalf and is lawfully authorized to engage in trust business in Pennsylvania or the state of the minor’s domicile, which trust

(i) is designated to receive the fund;

(ii) contains such terms for investment, disbursement and distribution of the fund as the court deems proper; and

(iii) expressly provides that it is subject to the court’s continuing jurisdiction, including the court’s right to modify or terminate, for cause shown, although the trust may be otherwise irrevocable.

(c) When a judgment has been entered in favor of a minor plaintiff and no petition has been filed under the provisions of subdivision (b) of this rule, the amount of the judgment or any part thereof shall be paid only to a guardian of the estate of the minor qualified to receive the fund, unless the court, on its own motion or on petition of a person, not a party to the action, representing the interest of the minor, enters an order under subdivision (b) of this rule.

(d) Nothing contained in this rule shall prevent the payment into court of any money by the defendent.

End

Plain-English Summary

A child's claim cannot be bargained away without oversight. This rule provides that no action to which a minor is a party may be compromised, settled, or discontinued without the court's approval, and governs how any settlement proceeds are distributed — protecting the minor from a deal that does not serve their interest.

Frequently Asked Questions

Can a minor's lawsuit be settled without court approval?

No. Court approval is required to compromise, settle, or discontinue a minor's action.

Who controls the settlement money for a minor?

The court, which approves the settlement and governs distribution of the proceeds.

Official Note

Official Note: The amount payable under subparagraph (1) conforms to the amount set forth in Section 5101 of the Probate, Estates and Fiduciaries Code, 20 Pa.C.S. § 5101, relating to when a guardian is unnecessary.

Official Note: The order should provide for deposits in more than one savings institution if future accrued interest may reasonably be expected to increase a single deposit beyond the insured limit. For the definition of savings account, see Rule 76. The rule contemplates the deposit of money in an account investing in federally guaranteed securities, withdrawals from which may be blocked, and not the direct investment in a particular security.

Official Note: This rule permits the use of a trust, including a special needs trust.

Official Note: The amendments to Rules 2039, 2064 and 2206 conform the Rules to the recent amendments to the Probate Estates and Fiduciaries Code made by Act 293 of 1974, 20 Pa.C.S. §§ 5101, 5103, 5505.

Amendment History

The provisions of this Rule 2039 adopted February 14, 1939, effective September 4, 1939; amended May 17, 1950; amended September 25, 1956, effective forthwith; amended April 2, 1962, effective forthwith; amended July 22, 1970, effective July 22, 1970; amended June 25, 1975, effective immediately, 5 Pa.B. 1817; amended October 3, 1996, effective January 1, 1997, 26 Pa.B. 4985. Immediately preceding text appears at serial pages (159488) to (190557).

Source & verification. Rule text, the Official Note, and the amendment history are reproduced verbatim from the Pennsylvania Code, Title 231, the official compilation of rules adopted by the Supreme Court of Pennsylvania. Last verified June 30, 2026. · Official text

Also known as: minor settlement approvalcompromise minor claimminor settlement distribution