The forms referred to herein are the State of California mandatory forms approved for use by the State Judicial Council. All Judicial Council forms can be found on the occourts.org website under the “Forms and Filing” tab on the main page or at the State of California website under forms. The rules of court that apply can be found in either the Orange County Local Rules or the California Rules of Court (CRC)
Probate Notes. The case will be evaluated by a court examiner and notes will be posted in the Probate Notes & Email Questions or Continuances section for Probate/Mental Health on the Orange County Superior Court website. The Notes will be posted 2 weeks in advance of the hearing date. All final documents in support of the Petition must be filed with the court no later than 5 court days before the hearing date.
Notice to Petitioners: Petitioners are advised to review the Probate Notes prior to appearing at the court hearing.
A parent or guardian ad litem has the right to compromise a minor’s claim. A disputed claim for a minor or person with a disability occurs when an adult signs on behalf of a child or person with a disability to compromise or settle a claim so that money can be received. The law doesn’t allow a minor or person with a disability to sign to compromise their own claim without the benefit of an adult guardian.
Forms - In 2009, the Judicial Council added a rule requiring that an MC 350 form be used to Petition the court for an order approving a compromise of minor’s claim (MC350E for expedited cases). The State Judicial Council Approved Forms and the Orange County Superior Court Local Forms are available online at http://www.occourts.org/forms-filing/. The most common forms are:
- CIV-010 Application and Order for Appointing Guardian ad Litem (if not filed with the civil complaint)
- MC-350 Petition to Approve Compromise of Disputed Claim
- MC-350EX Expedited Petition to Approve Compromise of Disputed Claim
- MC-351 Order Approving Compromise of Disputed Claim
- MC-355 Order to Deposit Money into Blocked Account
- MC-356 Receipt and Acknowledgment of Order for the Deposit of Money into Blocked Account
Click here for Minor’s Compromise packet
The Court may approve the petition as requested or make other orders as are deemed appropriate. Certain requests may be denied.
If you need more time, you may request the first continuance by email. Click here for more information
- An Expedited Petition for Compromise of Disputed Claim (MC 350EX) may be filed which could result in an earlier resolution of the disputed claim for the minor or person with a disability. CRC 7.950.5
- The rules that apply to an expedited petition can be found in CCP 372 et seq., PC 3500 et seq., CRC 3.1384, CRC 7.101, CRC 7.950, CRC 7.950.5, and item 3 of the State Judicial Council Approved Form MC350EX.
- If an expedited matter as provided in CRC 7.950.5 has been reviewed and is proper for approval, the order may be signed by the court on condition that the attorney and the petitioner sign and file an agreement to appear at a future hearing. The future hearing is the OSC re proof of compliance with the deposit into a blocked bank account or to show proof of purchase of an annuity.
The filing fee schedule can be found on the website for the Orange County Superior Court. Click here for the filing fee schedule.
Do I Need a New Filing Fee if a Civil Case Has Already Been Filed?
A new first filing fee is not necessary if the Petition is pursuant to a current pending civil action. However, a fee for the court reporter is required to be filed with the Petition for Compromise of Disputed Claim (MC350). The fee is required as per Government Code 68086(a)(1).
When there is No Action Pending
- Petitioner must be the parent, guardian or guardian ad litem
- Siblings shall be permitted to file under the same case number; however, there shall be a separate petition and order for each minor
When an Action is Pending
- The Petitioner MUST be the guardian ad litem of the minor or person with disability.
- The Petition must be eFiled unless you are self represented in which case the Petition can filed at the clerks office.
- A copy of the first page of the following MUST be attached to the petition: The Complaint, Amended Complaint, Cross Complaint and any Dismissals (from the civil case).
- A copy of the entire document of the following MUST be attached to the petition: Order Appointing Guardian Ad Litem and any awards of arbitrator with no trial de novo having been requested (from the civil case).
- Upon filing the documents, you will be given a hearing date.
The guardian and the minor/person with a disability are required to attend the hearing on the petition unless the court for good cause dispenses with their personal appearance. CRC 7.952. The appearance of the minor is not required if the Petition is filed due to wrongful death. However, the petitioner/guardian ad litem must still appear at the hearing on the Petition to Compromise the Minor’s Claim.
- Verified Petition. The Petition for Compromise of Minors Claim (MC 350) must be fully completed and verified by the parent/guardian ad litem/conservator (signed and dated under penalty of perjury). PC 1021, CRC 7.103. The MC 350 is a required document that must be used. The information requested in the MC 350 is detailed. In general, all the information requested on the MC 350 should be provided with documentation to support where needed.
- Documentary Support. The Petition must include all information in support of the reasonableness of the compromise of the claim for the minor or person with a disability including copies of the medical bills. CRC 7.950
- Doctors Report/Letter. The Court will require the filing of a doctor’s report/letter detailing the extent of the injuries or disability with a recent report or letter from the examining or attending physician in lieu of an appearance by the physician. The report shall include the diagnosed injury and the current prognosis for the injury. The medical report/letter should be filed with the petition or at least 5 court days before the hearing date. CRC 7.952. If a medical report/letter is not available then a copy of the medical bills must be attached to the Petition as attachment #9.
- Medical Lien Documents. If there are medical liens or claims for reimbursement to health insurance companies or automobile carrier (medpay), the Petition must include documentation confirming the amount of the medical lien including the demand letter/letter of compromise from the medical provider reflecting the final balance on the account for court approval. A statement showing only a balance is not sufficient.
- Medi-Cal or Medicare Documents. The Petition must include confirmation by letter from Medi-Cal or Medicare for any balance due or reimbursement. If the reimbursement was negotiated, the demand letter/letter of compromise reflecting the final balance is needed.
- Cost Reimbursement Documents. If an attorney is seeking reimbursement for costs advanced, there must be an easily understandable itemization showing the costs.
- Cost Reimbursement to Petitioner. If the Petitioner or Parent is seeking reimbursement for costs advanced, a copy of the invoice, a copy of cancelled checks or other documentation showing the expenses that were paid is required.
- Attorney Fee Requests. Requests for attorney fees must comply with CRC 7.951 and CRC 7.955 with a supporting declaration explaining the reason for the attorney fee request, including a discussion of the factors listed in CRC 7.955(B). The attorney fee retainer agreement is needed. See attorney fee section herein.
- Bank Name and Address. The Petition must include the name and address of the California banking institution to be used for any blocked bank accounts. The Petitioner is advised to confirm that the proposed bank will agree to open a blocked account before listing the bank on the MC 350. CRC 7.953
- Annuity Contract. When the Petition (MC 350) is filed the identity of the intended annuity company must be included with the schedule of payments for the annuity. The rating of the annuity company must also be filed with the court. The annuity company must be qualified with a minimum rating of A+. The Petitioner is to provide confirmation of the rating status for the annuity company. After the approval of the settlement, the court will set a hearing for filing a verified copy of the annuity contract. The copy of the annuity contract must also include a declaration from a person knowledgeable stating that the annuity policy is a complete copy of the original.
- Special Needs Trust. If a special needs trust is being utilized the court will require a copy of the trust documents.
- The funds received as part of the compromise of the minor’s disputed claim must be deposited into either a blocked bank account with a federally insured financial institution CRC 7.953 or used for the purchase an annuity with a minimum A+ AM Best rating. PC 3611 and PC 3412 do not negate the requirements of PC 3909 and CRC 7.953. (see information below on blocked accounts).
- If funds are needed prior to age 18, a Petition for withdrawal of funds must be filed to seek court approval of a withdrawal. CRC 7.954
- Additional forms, requirements and provisions for deposit and withdrawal of funds from a blocked account can be found in the Local Rules for Orange County Superior Court (occourts.org/Forms & Filings/LocalRulesofCourt).
An order for attorney fees and costs is authorized by PC 3601. Compliance with CRC 7.955 is necessary before the court can approve a request for attorney fees.
An Attorney Fee Declarations MUST be attached, as attachment 14a, to the Petition to Approve Compromise of Disputed Claim (MC 350). See paragraph 15a on the MC350EX form for Expedited Petitions to Approve Compromise. The attorney fee request will be reviewed pursuant to CRC 7.955(b). The declaration must include a statement from the attorney setting forth all the factors and circumstances in support of the reasonableness of the requested attorney fees and costs.
Attorney Fee Agreement. A copy of the attorney fee agreement must be provided for confirmation of the contractual fee amount.
If the attorney fees and costs were based on an hourly rate and time (ie. preparation of a Special Needs Trust), then an itemized statement must be provided for the court to review as to reasonableness of the requested attorney fees and costs.
When the Petition is approved, the Order for Minor’s Compromise will be reviewed after the Court’s minute order is completed and processed. If Order for Minor’s Compromise is approved the Court will sign it. If the original Petition was eFiled, a signed copy will be returned via eFiling. The return time is from 1 – 2 weeks after the hearing date.
If the Order for Minor’s Compromise is not proper, the submitting party will receive a rejection notice by e-filing. Once the corrections have been made, the order is to be resubmitted for review and signature by Court. Orders for Minor’s Compromise do not require a proof of service.
If the Court ordered funds to be deposited into a blocked bank account, a completed Order to Deposit Money into a Blocked Account (Mandatory Judicial Council Form MC-355) is to be submitted with the Order Approving Compromise of Claim or Action or Disposition of Proceeds of Judgment (MC 351).
Upon receipt of the signed orders by the Court, the party is to complete a Receipt and Acknowledgement of Order for the Deposit of Money into the Blocked Account (Mandatory Judicial Council Form MC-356) and submit that form to the federally insured financial institution. A bank officer must sign the MC-356.
Note: Blocked accounts must be set up in California (PC 3413(a)) where the court retains jurisdiction and vesting on the account should be as follows: (Name of parent/guardian ad litem) as trustee or custodian for (Name of minor). The California Uniform Transfer to Minors Act will be considered. PC 3900-3925.
Structured Settlements with Annuity. If the settlement included a structured settlement/annuity or single premium annuity, the defendant/defendant insurance company will purchase the annuity. A true and correct copy of the annuity must be provided to the court. Counsel/party must file a declaration under penalty of perjury stating they have reviewed the original annuity and stating that the attached copy of the annuity is a copy of the original. Should the original annuity be unavailable, the declaration should so state and the annuity company must then provide a declaration under penalty of perjury stating that the copy is a true and correct copy of the original annuity.
When the Petition is approved, the Court will set a Review Hearing for confirmation of deposit of the minor’s funds in a blocked account or confirmation of the purchase of an annuity. Counsel/parties are ordered to return on the date set for the review hearing. The Receipt and Acknowledgment of Order (MC-356), and /or the declaration re annuity stated above are to be filed no later than five COURT days prior to the hearing date.
If the proof of deposit into a blocked account (MC 356) or proof that an annuity was purchased have been timely filed with the court, the hearing date will be ordered off calendar and there will be no need to appear on the review date.
If the proof of deposit or proof of purchase of annuity are not filed or are insufficient, then an appearance will be needed at the review hearing. One continuance may be requested at the hearing.
If an annuity has been purchased with settlement funds, a verified copy of the annuity contract must be filed with the court. Payout on the annuity cannot commence until the minor reaches the age of majority, unless a Guardian of the Estate has been appointed. The measuring life for the annuity must be the life of the minor and the beneficiary of the policy must be the estate of the minor.
If the insurer offering the annuity is the same insurer as the defendant, the Court will require a verified supplement regarding the rate of return of the annuity, and at least 3 comparable quotes from other annuity companies, to ensure the minor is receiving the best possible rate of return on the principle.
The funds in the blocked accounts are the minor’s funds and shall not be withdrawn without a court order. The funds must be deposited into a federally insured institution account. PC 23, defines what is a Federally Insured Institution. Brokerage accounts, mutual funds and other such investments are generally not approved because of the risk involved and so are not appropriate for these circumstances.
Should a need for funds arise, the party must submit a Petition for Withdrawal of Funds from Blocked Account (MC-357), Order for Withdrawal of Funds from Blocked Account (MC-358), and appropriate documentation. The Court will consider the request for funds and may approve or deny the request, or set the matter for hearing.
If an annuity is purchased with settlement funds, the policies should be placed with the insurance company rated A+ by AM Best. Payouts should be after the age of 18, to meet the future needs of the minor. If payout is prior to age 18 or during incapacity, other alternatives should be considered. Once the litigation is concluded, the guardian ad litem is not authorized to handle the proceeds of the settlement/judgment (CCP 372). The appointment terminates upon the settlement of the case.
A Special Needs Trust may be used where the minor or person with a disability has a need to preserve eligibility to receive public benefits from public assistance entitlement programs. A trust is established and approved by the court to shelter the funds so the person with a disability does not lose eligibility to receive public assistance.
Special rules apply to Special Needs Trusts and can be found at Probate Code Section 3600 through 3613. The court must make certain findings pursuant to Probate Code 3604. 15 days notice is required to the following state agencies pursuant to Probate Code 3602(f), 3604(a)(2) and 3611(c) using the mandatory judicial council form DE 120 :
- State Department of Health Care Services
P.O. Box 997425
Sacramento, CA 95899-7425
- State Department of State Hospitals
1600 9th Street
P. O. Box 944202
Sacramento, CA 94244-2020
- State Department of Developmental Services
1600 9th Street, Room 151
Sacramento, CA 94244-2020
A Special Needs Trust is usually drafted by a lawyer who understands the rules that apply to eligibility for the various public benefit programs and the requirements of the Court.
In some cases where the money available to the minor or person with disability is low, and does not warrant it’s own special needs trust due to the amount, the use of "pooled trusts" managed by qualified non-profit entities may be used.
Probate Code Section 3604 provides authority and the rules for establishing a trust for the benefit of a disabled minor or adult.
A special needs trust may be established and continued only if the court determines all of the following (1) that the minor or person with a disability has a disability that substantially impairs the individual’s ability to provide for the individual’s own care and custody and constitutes a substantial handicap; (2) that the minor or person with a disability is likely to have special needs that will not be met without the trust; and (3) that the money to be paid to the trust does not exceed the amount that appears reasonably necessary to meet the special needs of the minor or person with a disability.
The order creating or approving the trust must reflect that the trust is subject to the courts continuing jurisdiction and may provide that the trust is to be subject to court supervision under the Probate Code. [CRC 7.903 (b)].
All special needs trust must comply with CRC 7.903 (c).
The trust is to reflect that:
- No additions to the trust can be made without court approval if a bond is required.
- During the lifetime of the beneficiary no gifts to others may be made without court approval
- Upon death of the beneficiary distribution is per prior testamentary documents or through intestacy
- The powers of the trustee are limited to the powers of the conservator of the estate
- The purchase or sale of real property or life insurance requires a prior court order and the trustee is liable per the provisions of the Probate Code.
If the beneficiary is a minor, the parents have a duty of support which the trustee must consider prior to making distributions.
If the court orders a bond for the trustee of the special needs trust, the bond calculations include: principal, estimated annual income and 10% recovery fee up to $500,000, 12% of the value above $500,000 and 2% of the value above $1,000,000 (CRC 7.207)
Special Needs Trust Accounting Review Hearing
At the time of approval of the Petition to Compromise which includes a special needs trust, a review hearing will be set by the court for the filing of the first accounting on the trust.