(a) A guardian is authorized to compromise all contested or doubtful claims for or against the ward he represents and may submit such matters to arbitration. A debtor may be released by the guardian if the release is in the interest of the ward. Furthermore, the guardian may appoint an attorney in fact in the matter, for whose acts the guardian shall be responsible.

(b) If an order of approval is obtained from the judge of the probate court based upon the best interest of the ward, the guardian is authorized to compromise any contested or doubtful claim in favor of the ward he represents without receiving the consideration for such compromise as a lump sum. Without limiting the foregoing, such compromise may be in exchange for an arrangement which defers receipt of part or all of the consideration for the compromise until after the ward reaches majority and may involve a structured settlement or creation of a trust on such terms as the court approves.

(c) In the event the gross settlement amount for a minor child's claim is $5,000.00 or less, the natural guardian of said minor child may execute and deliver to the person or entity against whom the minor has a claim a release of said claim without becoming the legally qualified guardian of the property and without such guardian's action being approved by a court of record.

(d) If legal action has not been initiated, the judge of the probate court may, in his or her discretion, authorize any natural guardian to compromise and terminate any claim where the gross settlement amount approved by the court is over $5,000.00 but the net settlement amount is less than $10,000.00 without becoming the legally qualified guardian; provided, however, the natural guardian shall hold and use such money for the benefit of the child and shall be accountable for same.

(e) If legal action has not been initiated and the net settlement is $10,000.00 or greater, the natural guardian must apply to become the legally qualified guardian and the proposed settlement must be submitted to the probate court for approval.

(f) If legal action has been initiated through a natural guardian as next friend, a settlement is proposed, and the gross settlement amount approved by the court is over $5,000.00 but the net settlement is less than $10,000.00, the judge before whom such action is pending may, in his or her discretion, authorize such natural guardian to compromise and terminate such claim and to receive any sums paid pursuant to a compromise or judgment without becoming the legally qualified guardian by the probate court; provided, however, the natural guardian shall hold and use such money for the benefit of the child and shall be accountable for same.

(g) If legal action has been initiated through a natural guardian as next friend and a settlement has been proposed under subsection (f) of this Code section and the net settlement amount is $10,000.00 or greater, or where the trial judge otherwise requires a legally qualified guardian, the natural guardian shall apply to become the legally qualified guardian and shall file with the judge of the probate court an initial bond payable to the probate court in an amount set by the trial judge prior to compromising or terminating such claim or receiving any sums paid pursuant to a compromise or judgment.

(h) If no legal action has been instituted concerning a claim of a minor against any person or entity, a guardian who is not the natural guardian must obtain the approval of the probate court before compromising such claim. If legal action has been instituted concerning a claim of a minor against any person or entity, a guardian who is not the natural guardian must obtain the approval of the judge before whom the action is pending before compromising such claim. Either the probate judge or the judge before whom the action is pending may appoint a guardian ad litem to look into the best interests of the minor before approving a compromise claim.

(i) If legal action has been instituted and the guardian and the defendant in such action have agreed upon a settlement, the settlement must be approved by the judge of the court before whom the action is pending. The guardian shall not be permitted to dismiss the action and present the settlement to the probate court for approval without the approval of the trial judge before whom the action is pending.

(j) Any settlement entered consistent with the provisions of this Code section shall be final and binding upon all parties, including the minor child.

(k) The term "net settlement" shall mean the gross settlement less attorneys' fees, expenses of litigation, and medical expenses for the ward which will be paid from the settlement proceeds. For purposes of determining whether a settlement must be submitted to a court for approval, the "gross settlement" shall include the present value of amounts received after majority, but for purposes of whether a guardian of the property is necessary, "gross settlement" and "net settlement" shall not include amounts to be received after majority. In determining the present value for purposes of this Code section, the present value of any payments to be received in the future by or on behalf of the minor shall be deemed to be the cost paid by or on behalf of the alleged tort-feasor to purchase any annuity or other financial arrangement; and if the alleged tort-feasor or his or her insurer undertakes to make such future payments without purchasing an annuity or other financial arrangement, the present value shall be deemed to be the value in current dollars as calculated in good faith by the alleged tort-feasor or his or her insurer.