Court Registry, Trusts and Structured Settlements for a Child in Louisiana

By the FigureMyTax Editorial Team · How we calculate

When a Louisiana court approves a payment to a minor from a judgment or settlement, it may order the money paid into the court registry, invested, placed in trust or paid under a structured settlement, or a combination.

The court's options

Code of Civil Procedure art. 4521(A) says the court may order (1) that the funds be paid directly into the registry of the court for the minor's account, to be withdrawn only on court approval, then invested in an interest-bearing investment the court approves; (2) that the funds be invested directly in such an investment; (3) that the funds be placed in trust under the Louisiana Trust Code, or for a disabled beneficiary in a qualifying special needs trust; (4) that they be paid under a court-approved structured settlement with periodic payments underwritten by a financially responsible entity; or (5) a combination.

How a trust works

The trust must name the minor as sole beneficiary, name a trustee and impose maximum spendthrift restraints, and may last for the beneficiary's lifetime. Except for qualifying special needs trusts, the beneficiary may terminate it on reaching majority, and if the minor does not reach majority the heirs or legatees may terminate it. The court may not order a trust for an unemancipated minor in the custody of the Department of Children and Family Services if the settlement is under $50,000.

How the court chooses

For a proposed periodic payment schedule, the court considers the minor's age and life expectancy, current and anticipated needs, income and estate tax implications, the effect on government benefits and the present value of the arrangement and how it is calculated.

Withdrawals and checking accounts

Investing, reinvesting or withdrawing a minor's funds requires court approval after compliance with Article 4271. The court may let a tutor keep a checking account "tutor on behalf of the minor" for necessary expenses, with transfers into it limited to $5,000 a year except for good cause (art. 4270).

What we did not find

We did not read local court rules on forms and fees. Ask the court what it will require. Then read why a court must approve and what we found about attorney fees, and see what is left in the Louisiana minor's settlement calculator.

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