Minors Trust Funds

Chapter 117 of the Local Gov.Code

In a suit in which a minor is awarded money, the judge shall order all funds paid into the registry of the court for the clerk to administer. The judgment shall instruct the clerk as to exactly how the funds are to be invested.

A district clerk who is to have more than three days legal custody of money shall deposit the money in the registry of the court (not in fees of office account);
Deposit as a trust fund in the name of the clerk.

Docket and index in Trust Fund book/computer;
Upon filing order of investment, record name of financial institution, date and account number of investment on docket for audit purposes;
Collect the appropriate fee to compensate the county for the administrative expenses incurred in handling the trust funds. (Not to exceed $50.00)
The clerk may deduct the fee amount from the initial deposit.

The full name, address and telephone number of the custodial parent or guardian;
The birth date and social security number of the minor.

Savings accounts of certificates of a savings and loan association domiciled in this state and insured by the F.S.L.I.C.; or
Interest-bearing time deposits in a bank doing business in the state and insured by the F.D.I.C.

Provide the financial institution a certified copy of the investment order if the order stipulates withdrawals are not to be made without a court order;
Prepare a receipt of safekeeping for an officer of the financial institution to sign, whereby the officer agrees that withdrawals are not to be made without court order.
Upon court order, the clerk may also invest these funds in government secured instruments so long as such investment does not interfere with authorized withdrawals.
Since Government and Treasury Bonds are purchased in "strips" of even amounts, the Order must set out how the clerk is to administer or invest possible excess funds.

If a court order authorizes a next friend or other person to take possession of the money or property, he must execute a bond to be filed with the clerk. [Property Code 142.002 (b)]
If the money invested may not be withdrawn from the financial institution without an order of the court a next friend WHO MAKES THE INVESTMENT is NOT required to execute a bond with respect to the money. [Property Code 142.004 (b)]

Name, address and telephone number of minor's custodial parent or guardian, financial institution and attorney;
Date of minor's eighteenth birthday;
Minor's social security number;
Date of deposit;
Account number;
Maturity date;
Date and amount of partial withdrawals;
Date and amount of interest deposit; and
Balance after each deposit.

(Although the Internal Revenue Service does not require reporting of interest until the funds are disbursed, some parties prefer to report annually)

Upon receipt of a 1099, the clerk shall place a copy in the case file and forward the original form to the proper party.

Notify the financial institution prior to the maturity date that withdrawal will be made;
Have the recipient sign a receipt for the investment deposit. Upon signing a receipt, the recipient may personally withdraw the funds;
Close the account and record the order authorizing this action in the minutes of the court.

Minors Trust Funds
Chapter 117 of the Local Gov.Code