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What this article covers

Step‑by‑step practical guidance a nonlawyer can follow when you need to turn settlement money that belongs to a minor into an annuity or other protected arrangement under Wyoming law. This covers the common routes—court approval and guardianship/conservatorship, custodial accounts, and structured settlement annuities—and practical considerations such as taxes, benefits, and selecting an insurer.

Disclaimer: This is general informational material and not legal advice. For legal advice about your situation, contact a Wyoming attorney who handles minor-compromise, guardianship, or structured-settlement matters.

Detailed answer — how the process usually works in Wyoming

When settlement funds belong to a child, Wyoming courts and agencies prioritize protecting the child’s money until the child reaches majority (or the court orders otherwise). You usually have three main approaches:

1. Ask the court to approve a structured settlement (annuity) as part of the minor‑compromise.

   If the settlement arises from litigation (for example, a personal‑injury suit on behalf of a minor), most Wyoming courts will require a petition for approval of the minor’s compromise. The court can approve the settlement terms and order that proceeds be used to buy an annuity (a structured settlement) or be handled in another protective manner. The petition process lets the court review the proposed annuity and ensure it is in the child’s best interest.

2. Appoint a guardian of the estate (conservator) and have the guardian arrange for the annuity.

   If there is no effective settlement-approval process or if the funds are already in hand, a guardian of the child’s property can be appointed under Wyoming guardianship/conservatorship procedures. The guardian will be authorized by the court to manage or invest the funds for the child, and the court will supervise the guardian’s handling of the money (including bond, accounting, and periodic reports to the court).

3. Use a custodial account or a statutory transfers-to-minors vehicle (if available and appropriate).

   Some families use a custodial account (for example, under the state’s transfers-to-minors law) to hold funds until the child reaches the statutory age. Custodial accounts are simpler in some cases but usually give the custodian broad control and do not provide the same court supervision or spendthrift protection as a structured settlement or a court-ordered trust. For children receiving public benefits, a custodial account may affect eligibility.

Typical court steps to approve and implement an annuity

1. Retain or consult with an attorney experienced in minor‑compromise or guardianship matters. The attorney usually files the petition to the district court asking approval of the settlement and describing the proposed use of proceeds.
2. The petition typically asks the court to approve the settlement terms, confirm the amount to be paid now and later, and to direct how proceeds should be held (for example, purchase of a structured settlement annuity or placing funds in a blocked account or trust).
3. Provide the court with information about the annuity product and insurer: manufacturer name, policy terms, payment schedule, financial strength, and any lump-sum vs periodic payment comparisons.
4. After the court holds any required hearing and approves the petition, the court issues an order directing the settlement administrator or defendant to pay according to the court’s terms (for example, pay the insurer to buy an annuity or deposit funds into a blocked account).
5. If an annuity is used, the insurer issues periodic payments directly to the child (or to the guardian/trustee, depending on the order). The court will retain jurisdiction for accounting or disputes where required.

Key legal protections and oversight to expect

• Court approval: The court reviews whether the settlement or annuity choice is in the child’s best interest.
• Guardian/Conservator supervision: If a guardian of the estate is appointed, the guardian must account to the court and often post a bond.
• Blocked accounts or trusts: Courts sometimes order funds to be held in a restricted (blocked) bank account, trust, or annuity if they want to control access until the child reaches maturity or for longer.
• Insurance regulation: Annuities must be issued by companies authorized to sell annuities in Wyoming; the Wyoming Department of Insurance regulates insurers licensed in the state.

Where to look for Wyoming statutory and court resources

Wyoming’s statutes and judicial resources explain court procedures, guardianship rules, and how courts review minor compromises. For official information:

• Wyoming Legislature statutes and statutes index: https://wyoleg.gov/
• Wyoming Judicial Branch (forms and local court information for guardianship/minor‑compromise matters): https://www.courts.state.wy.us/
• Wyoming Department of Insurance (verify insurer licensing and complaint history): https://doi.wyo.gov/

Federal tax note affecting structured settlements

Structured settlement payments from certain qualified assignments can be tax‑free to the recipient under federal tax law (26 U.S.C. §130) when the settlement meets IRS rules. For background on the federal rule, see the U.S. Code and IRS guidance such as Cornell’s US Code text for 26 U.S.C. § 130: https://www.law.cornell.edu/uscode/text/26/130. A tax adviser can tell you how a particular structured settlement will be treated.

Common reasons courts prefer annuities or supervised arrangements

• To prevent dissipation of the funds before the child is mature.
• To structure lifetime or long‑term care payments rather than a single lump sum that could be misused.
• To protect eligibility for public benefits (if the settlement is structured properly, or if a special needs trust is used).

Helpful hints — practical checklist when setting up an annuity for a Wyoming child

• Consult a Wyoming attorney early. Courts expect petitions to be well documented and framed around the child’s best interest.
• Get multiple annuity quotes. Compare payment schedules, insurer ratings, surrender features, and fees.
• Verify the insurance company is licensed in Wyoming via the Wyoming Department of Insurance: https://doi.wyo.gov/.
• Consider who will be the annuity payee and who will receive statements. The court order often directs whether payments go directly to the child, the guardian, or a trustee.
• Think about public benefits. If the child receives or may later qualify for Medicaid, SSI, or other needs‑based benefits, consult an attorney about a special needs trust or other protective vehicle rather than a custodial account that could count as available resources.
• Ask the court about ongoing supervision: whether the guardian must file annual accountings and whether the court will require reporting about the annuity.
• Understand surrender and transfer rules. Many annuities are not easily converted to cash without penalties. Know whether the plan includes a guaranteed period and what happens if the insurer becomes insolvent.
• Keep careful records. Retain copies of the settlement, court order, annuity contract, insurer communications, and court accountings.
• Ask about tax consequences. Structured settlement payments may be tax‑free in many personal‑injury cases, but lump sums or interest on invested funds can have taxable aspects. Talk with a tax professional.
• Plan for changes. If circumstances change (for example, the child becomes disabled or needs immediate funds), seek a court modification rather than attempting to alter the annuity or trust without approval.

When to get legal help

Contact a Wyoming attorney if any of the following apply:

• The defendant or insurer resists court approval or refuses to buy the annuity directly;
• You need a guardianship or conservatorship hearing;
• You need to protect benefits eligibility (Medicaid/SSI) or to set up a special needs trust;
• You want to propose a complex payment schedule (life contingent, inflation adjustments, escalating payments) that needs court review;
• There is disagreement among family members about how to handle the funds.