Short answer

To place settlement money for a minor into an annuity in Iowa you usually need to (1) get the settlement approved by the court or the appropriate guardian/conservator process, (2) choose an appropriate structured settlement or annuity product, and (3) document that the annuity purchase protects the child’s interests (including benefits and creditors). Many settlements for minors require court approval or a guardian ad litem; a lawyer with experience in minor settlements or structured settlements can guide you through paperwork, court filings, and vendor selection.

Detailed answer — step by step

1. Confirm whether court approval is required

In Iowa, settlements that resolve claims on behalf of a minor commonly require court approval so the judge can confirm the settlement is in the child’s best interest. If a guardian, conservator, or guardian ad litem is already involved, that person usually must petition the court for approval of the compromise and the proposed plan for the funds (for example, purchasing an annuity). The Iowa Judicial Branch provides public information about guardianship and conservatorship that explains the court’s role in protecting minors: https://www.iowacourts.gov/.

2. Decide whether an annuity is the right vehicle

Annuities (including structured settlements) create a stream of payments to the child. Benefits:

• Predictable periodic income.
• Can be tailored to pay at certain ages or milestones.
• May protect a portion of funds from poor spending decisions.

Limitations and risks:

• Irrevocable once purchased; limited flexibility.
• Potentially lower available cash for urgent needs.
• Possible effects on public benefits if the child is disabled.

3. Consider alternatives and complementary protections

Alternatives include custodial accounts (UGMA/UTMA), a court-supervised conservatorship/guardian account, a trust (including a special needs trust if the child receives public benefits), or a combination (e.g., a trust that owns an annuity). Trusts can offer more control, creditor protection, and benefits planning than a simple annuity or custodial account.

4. Work with counsel and a guardian ad litem (if required)

A lawyer experienced with minor settlements can prepare the petition, notify interested parties, and present the proposed annuity arrangement to the court. In many cases, the court will require an independent guardian ad litem or attorney to investigate the settlement and advise the court whether the arrangement is in the child’s best interest.

5. Select the annuity / structured settlement vendor

Structured settlements for personal-injury-related awards are commonly funded by a life insurance company annuity. Steps include:

1. Obtain competing quotes and review payment schedules, company ratings, and contract terms.
2. Decide on payment timing (monthly/yearly), duration (through age X, for life, or a mix), and contingencies (what happens if the payee dies before receiving all payments).
3. Confirm the annuity issuer is licensed in Iowa and financially stable.

6. File court documents and get approval

The court usually reviews: (a) the underlying settlement agreement; (b) an explanation why an annuity or structured settlement is appropriate; (c) the proposed annuity contract or proof of purchase; and (d) any attorney or guardian ad litem reports. If the court approves, it may order the settlement funds paid to an annuity issuer or to a trustee/guardian to purchase an annuity on the child’s behalf.

7. Purchase the annuity and implement the court order

Once the court signs an order, the payer (insurer, defendant, or settlement fund) transfers the approved amount. The annuity issuer then issues the contract in the name specified by the court (often the minor or a court-supervised trust/guardian). Keep certified copies of the court order and the annuity contract in the child’s permanent records.

8. Ongoing administration and future modifications

Most annuities are not modifiable without consent of the payee and often require court action for changes. If a child’s needs change (medical, educational, or benefit eligibility), a court may be asked to authorize alternative uses of funds or to approve a different arrangement.

Key legal considerations in Iowa

Specific Iowa statutory citations vary by topic (guardianship, trusts, probate practice, and insurance regulation). For an overview of court-supervised guardianship and conservatorship procedures in Iowa, see the Iowa Judicial Branch: https://www.iowacourts.gov/for-the-public/guardianship/. For state laws, use the Iowa Legislature’s official site to look up current code provisions that may affect minor settlements and trusts: https://www.legis.iowa.gov/.

Other useful resources:

• Iowa Department of Human Services (Medicaid and benefits rules): https://dhs.iowa.gov/
• Social Security rules on trusts and benefits (federal): https://www.ssa.gov/
• IRS information on taxation of annuities and structured settlements (federal): https://www.irs.gov/

Practical checklist before you proceed

1. Talk to an attorney experienced with minors’ settlements in Iowa.
2. Ask whether the court must approve the settlement or purchase of an annuity.
3. Consider whether a trust or special needs planning is required to protect benefits.
4. Get multiple structured settlement/annuity quotes and check insurer ratings (A.M. Best, etc.).
5. Request written explanations of tax and benefits consequences.
6. File all necessary petitions and obtain a formal court order before finalizing the annuity purchase.
7. Keep records of the court order, annuity contract, and communications about the purchase.

Helpful hints

• Start early: court calendars and the structured settlement process can take weeks to months.
• Ask for a payment schedule that matches likely needs: college, medical care, or milestone sums.
• If the child receives Medicaid or SSI, consult an attorney about a special needs trust or other planning before buying an annuity.
• Get everything in writing: court petitions, settlement agreements, annuity illustrations, and insurer confirmations.
• Verify who the annuity names as payee and successor payee—confirm this matches the court order.
• Beware of high fees or commissions; compare net payment to the child across providers.
• Keep a copy of the court approval and contact information for the insurance company in the child’s file.

When to hire a lawyer

Hire an attorney when the settlement is significant, when public benefits are involved, when disputes among family members exist, or when the court will require formal approval. A lawyer can prepare the petition, help select an appropriate annuity or trust, and present the plan to the court to obtain the required order.