How Do Structured Settlements Work in Georgia, and What Are the Rules?
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A structured settlement resolves an injury claim with payments spread over time instead of one lump sum. In Georgia, two sets of rules apply. For a minor’s claim, O.C.G.A. § 29-3-3 decides whether the natural guardian can settle alone or needs court approval and a conservator, and it expressly allows the court to approve “a structured settlement or creation of a trust”. For anyone who later wants to sell future payments, the Georgia Structured Settlement Protection Act, which took effect July 1, 2021, provides that no transfer is effective unless a court approves it in advance and finds it “in the best interest of the payee”.
Federal tax treatment
Under 26 U.S.C. § 104(a)(2), gross income does not include “the amount of any damages (other than punitive damages) received (whether by suit or agreement and whether as lump sums or as periodic payments) on account of personal physical injuries or physical sickness”. Periodic payments for a physical injury are treated the same as a lump sum for that exclusion; punitive damages are not covered.
Minors’ settlements after the 2022 amendment
House Bill 620 (2022) rewrote § 29-3-3, effective May 2, 2022, according to the 2022 legislative summary, which describes the act as revising the definition of “gross settlement”, adding a definition of “net settlement”, and revising when a conservator or court approval is required. In the text that passed both chambers, the threshold rises from $15,000 to $25,000, and the rule turns on two figures, the gross settlement and the net settlement. House Bill 1268 (2026), a Code revision act, made an editorial change to the section’s wording.
| Situation | Rule | Source |
|---|---|---|
| Gross settlement of $25,000 or less | The natural guardian may compromise the claim, and receive and hold the payment for the minor, without becoming conservator and without court approval | § 29-3-3(c)(1) |
| Gross settlement above $25,000, net settlement of $25,000 or less | No conservator is required; the settlement goes for approval to the probate court if no lawsuit has been filed, or to the court where the lawsuit is pending | § 29-3-3(c)(2) |
| Gross and net settlements both above $25,000 | A conservator must compromise the claim and receive the payment, and submits the settlement to the probate court if no lawsuit has been filed, or to the court where the lawsuit is pending | § 29-3-3(c)(3) |
| Lawsuit filed but no longer pending, and the trial court did not retain jurisdiction | A settlement that would have gone to the trial court goes to the probate court instead | § 29-3-3(g)(3) |
“Gross settlement” is the present value of everything paid or to be paid in settlement of the minor’s claim, including cash, litigation expenses, attorney’s fees, and “any amounts allocated to a structured settlement or other similar financial arrangement”, on behalf of all settling parties. “Net settlement” is the gross amount reduced by attorney’s fees, litigation expenses, and legally enforceable liens paid from the proceeds; by the present value of amounts the minor will receive after reaching majority; and by the present value of amounts placed in a trust the court approves or creates for the minor. A structure that pays most of the money after age 18 therefore lowers the net settlement, and with it can remove the conservator requirement. Under subsection (d), once a court approves the settlement as in the minor’s best interest, the compromise may involve a structured settlement or trust and may defer receipt so that no more than $25,000 in total is paid before the minor reaches majority, or defer all of it. A settlement entered consistent with the section “shall be final and binding upon all parties, including the minor” (§ 29-3-3(e)).
Selling future payments: the Structured Settlement Protection Act
| Protection | Rule | Source |
|---|---|---|
| Registered buyer | A company may not act as a transferee, try to buy payment rights from a payee who lives in Georgia, or file a transfer proceeding here unless it is registered with the Secretary of State; registration requires a $50,000 surety bond, letter of credit, or cash bond | § 51-12-73 |
| Disclosure 10 days ahead | At least 10 days before the payee signs, the transferee must give a separate disclosure statement in bold type of at least 14 points showing the payments to be transferred, their discounted present value and the federal rate used, the gross advance amount, itemized transfer expenses, the effective annual interest rate, the net advance amount, and any penalties for breach | § 51-12-76 |
| Right to cancel | The disclosure must tell the payee that the transfer agreement can be canceled, without penalty or further obligation, until the court approves the transfer | § 51-12-76(9) |
| Advance court approval | No transfer is effective, and no obligor or annuity issuer must pay a transferee, unless a final court order approves it in advance on express findings that it "is in the best interest of the payee, taking into account the welfare and support of the payee's dependents", that the payee was advised in writing to seek independent professional advice, and that it violates no statute or court order | § 51-12-77 |
| Court and hearing | The transferee applies in the superior court of the county where the payee lives; notice goes to all interested parties at least 20 days before the hearing, and the payee must appear in person unless the court excuses it for good cause | § 51-12-79 |
| Enforcement | A payee may sue over a prohibited act and recover damages under the article, the Fair Business Practices Act, or other law; a court may revoke or suspend the company's registration or bar it from filing new transfer proceedings | § 51-12-74 |
The act applies to transfer agreements signed on or after July 1, 2021, and a payee cannot waive its protections (§ 51-12-80). It replaced the earlier article on transfers in its entirety, so older descriptions of a 21-day rescission period or an Attorney General penalty describe the repealed law.
Before agreeing to a structure, or to selling one
- For a minor, compute both the gross and the net settlement, since they decide whether court approval and a conservator are needed; whether a lawsuit is pending decides which court approves.
- Confirm that the amount allocated to the structure is included in the gross settlement figure.
- If you are asked to sell payments, compare the net advance amount with the discounted present value and the effective annual interest rate shown on the 14-point disclosure.
- Check that the buyer is registered with the Secretary of State, and remember that the agreement can be canceled without penalty until the court approves the transfer.
How minor children’s shares are protected in a wrongful death settlement is explained in what protects minor children’s shares when a surviving spouse settles.
Sources
- House Bill 620 (2022), as passed House and Senate, § 3; Georgia General Assembly, 2022 Summary of General Statutes Enacted.
- House Bill 1268 (2026), as passed House and Senate, Code revision act listing § 29-3-3.
- House Bill 443 (2021), as passed House and Senate, enacting O.C.G.A. §§ 51-12-71 through 51-12-80, effective July 1, 2021; §§ 51-12-73 and 51-12-76 were amended in 2022 by House Bill 1428, a Code revision act.
- 26 U.S.C. § 104 (Cornell Legal Information Institute)
General information about Georgia law as of October 2026. It is not legal advice, and reading it does not create an attorney-client relationship.