Blocked Accounts and Structured Settlements for a Child in Minnesota

By the FigureMyTax Editorial Team · How we calculate

A Minnesota court deciding a child's settlement may order the balance invested in federal securities or an annuity or structured settlement, deposited in fully insured accounts in the child's name with no withdrawals without a court order, or secured by a bond.

The options

General Rule of Practice 145.05(d) says the court may authorize investment of all or part of the balance in United States securities or in an annuity or other structured settlement, including a medical assurance agreement. Otherwise it orders the balance deposited in banks, savings and loans or trust companies where the deposits are fully covered by federal deposit insurance. In lieu of that, the order may require a court-approved surety bond.

How deposits work

The order directs that the defendant pay the deposit directly to the institution, that the account be opened in the child's name, that the institution acknowledge the order to the court and make no disbursement except on court order, that time deposits mature on or before the age of majority, and that the petitioner file timely state and federal tax returns for the child (Rule 145.05(e)).

The statute

Minn. Stat. 540.08 lets the court, instead of a parent's bond, order the property invested in federal securities, an insured account or an annuity or structured settlement. Money in a court-established account is not available to the child or parent until the court releases it.

What we did not read

We did not read the rest of Rule 145.05 on authorizing withdrawals, or local court forms. Ask the court what it will require. Then read why a court must approve and how the one-third fee cap works, and see what is left in the Minnesota minor's settlement calculator.

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