Trusts, College Savings and Structured Settlements for a Child in Virginia

By the FigureMyTax Editorial Team · How we calculate

Virginia courts direct a child's settlement proceeds into court, into a college savings trust account with a parent as custodian, to a qualified fiduciary, or to a parent or guardian to hold in a court-approved trust. Payments over time must be secured by a bond or an insurer rated A+ or better.

The options

Va. Code 8.01-424(D) directs payment into court or to the general receiver; for a minor, into a Commonwealth Savers Plan college savings account restricted to target enrollment portfolios, with a parent as custodian barred from withdrawals except for qualified higher education expenses without a court order; to a duly qualified fiduciary after inquiry into the bond; or as 8.01-606 provides.

Trusts

Subsection E lets the court order payments to a parent or guardian to be held in trust for the minor, subject to court approval. The court may end the trust at any time after majority that it finds best, and may require the trustee to qualify, file an inventory and render annual accountings.

Structured settlements

If the agreement pays over time, the court may approve it only if all payments are secured by a bond from an authorized insurer or made or irrevocably guaranteed by authorized insurers rated A+ or better. Payments totaling $4,000 or less in a calendar year may be paid under 8.01-606; more than that while the recipient is under a disability goes to a qualified fiduciary.

Fiduciary accounts

A guardian of a minor's estate must exhibit an account to the commissioner of accounts within six months of qualifying and annually after (Va. Code 64.2-1305). Read why a court must approve and what we found about attorney fees, and see what is left in the Virginia minor's settlement calculator.

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