Kentucky Minor Protective Trust
It is not unusual for a minor to be the recipient of a legal settlement or receive an inheritance or proceeds from a sale. Often, the court will intervene to approve these settlements to protect the interests of the minor. With the passage of HB 170 in the state of Kentucky, more settlements can be reached without court approval, saving both sides time and legal fees. Although this legislation is intended to transform and streamline Kentucky’s laws related to settlements involving minors, it also creates new duties and responsibilities for those attorneys settling these cases.
Effective April 8th, 2022, the Kentucky legislature enacted KRS 387.278 which provided new requirements and procedures for legal settlements of $25,000 or less, involving minors. This statute mandates that the attorney, or fiduciary, handling such settlements must place the funds into a restricted savings account, investment account, or purchase an annuity. In lieu of a conventional court order, the new statue allows an affidavit or verified statements signed by the attorney, or appropriate authority, to fund the protected account. These moneys can only be accessed by the minor pursuant to court order until such time as the minor reaches the age of majority, or upon the death of the minor.
As a result of this new statue, any attorney settling a case for $25,000 or less involving a minor can effectively become trustee of their client’s money until one of the abovementioned qualifying events terminates the account. Along with the duties of maintaining and administering the funds, the attorney will be held to certain fiduciary duties and standards.
The Irrevocable §387.278 Settlement Agreement Trust, or “Kentucky Minor Protective Trust” was created to alleviates these responsibilities from the attorney and places them with a dependable and reliable corporate trustee with decades of experience. This trust specifically incorporates the requirements of KRS 387.278 and preserves the funds conveyed to the trust for the future use and benefit of the minor beneficiary.
Click the link below to read through the “Kentucky Minor Protective Trust” or contact The Directed Benefits Foundation team for more information on this and all other trust solutions.