Custodial Accounts, Trusts and Structured Settlements for a Child's Settlement in Iowa

By the FigureMyTax Editorial Team · How we calculate

Iowa lets money due to a minor go, without a conservator, to a UTMA custodian, a custodial trustee, a 529 or ABLE account owner, or a structured settlement obligor, up to $50,000 in the aggregate, and above that with court authorization.

The listed arrangements

Under Iowa Code 633.555(1), the five arrangements are (a) a custodian under a Uniform Transfers to Minors account, (b) a custodial trustee under a uniform custodial trust account, (c) an account owner or participant in a 529 college savings plan account, (d) the account owner of an ABLE account for a person with disabilities, and (e) the obligor of a structured settlement for the benefit of the minor, where the minor will not begin receiving payments before age eighteen.

How they differ

A UTMA account is simple and the child receives it at the age set by that law; a custodial trust and a structured settlement can delay payment to the age and pattern chosen; a 529 account is limited to education uses; an ABLE account is limited to people with disabilities. The trade-off is predictability and protection against spending everything at once, against less flexibility if needs change.

Above $50,000

If the money due to the minor exceeds $50,000, the arrangements may be used only if the court authorizes the transfer. Otherwise a conservatorship is the route; the court may then order an independent attorney review of the compromise, with its cost taxed to the conservatorship (633.648).

What we did not find

We found no Iowa statute that requires a blocked, court-restricted account, and we did not read the Iowa Court Rules on how a court orders the money held. Ask the court what it will require. Then read why and when a court gets involved and what we found about attorney fees, and see what is left in the Iowa minor's settlement calculator.

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