Guardianship or Direct Payment for a Child's Settlement in Arkansas

By the FigureMyTax Editorial Team · How we calculate

If a child's whole estate is $25,000 or less, an Arkansas court may skip the guardianship and bond and direct the money to the child or a suitable person; above that, expect a guardian of the estate who must protect, invest and account for the money.

The $25,000 option

Under Ark. Code 28-65-502, when the whole estate of a minor or incompetent does not exceed $25,000, the court, in its discretion, without appointing a guardian or requiring a bond, may authorize payment or delivery of all or part of the estate to the minor or to some suitable person, institution or agency, to be retained, used, expended, distributed or disposed of for the minor's benefit as the court may direct. It is discretionary, and it counts the whole estate, not just the settlement.

A guardian of the estate

For larger estates, the guardian of the estate must exercise due care to protect and preserve the money, invest and apply it as the guardianship chapter provides, account for it faithfully, and at the end of the guardianship deliver the assets to the persons entitled to them. The law of trusts applies to those duties (Ark. Code 28-65-301). The guardian petitions the court to authorize the settlement under 28-65-318.

Blocked accounts and structured settlements

We did not find an Arkansas statute that names blocked accounts or structured settlements for minors. Because the court "may direct" how the money is retained or used, those arrangements are usually a matter of the court's order, so ask the judge or the clerk what the court typically requires. If a structured settlement is proposed, make sure the order says how and when the child receives the payments.

When the child gets control

A guardianship of the estate ends when the child turns 18, and the guardian delivers the assets then. Under a direct payment order, the court's order controls how long the money is held and what it may be used for.

A survey caution

An older national survey says the court can dispense with a guardianship when the estate does not exceed $5,000; the statute now says $25,000, so follow the statute and ask the court.

Before you choose

Read why a judge must approve the settlement and how the attorney fee is reviewed, then see what is left in the Arkansas minor's settlement calculator.

This is general information, not legal advice, and the state comparisons above are illustrative, not an exhaustive survey. Confirm how Arkansas's rules apply to your specific case with a licensed Arkansas attorney.