House Bill 1394

AN ACT TO CREATE NEW SECTION 93-20-433, MISSISSIPPI CODE OF 1972, TO AUTHORIZE THE CHANCERY COURT TO DISPENSE WITH FORMATION OF A CONSERVATORSHIP FOR A MINOR BEING AWARDED FUNDS UNDER A SETTLEMENT AGREEMENT; TO AUTHORIZE THE COURT TO ALLOW THE PETITIONER PRESENTING THE SETTLEMENT FOR APPROVAL TO ASSUME THE DUTIES AND RESPONSIBILITIES THAT OTHERWISE WOULD BE EXERCISED BY A CONSERVATOR WHENEVER A CONSERVATORSHIP IS NOT ESTABLISHED; TO BRING FORWARD SECTION 93-20-431, MISSISSIPPI CODE OF 1972, WHICH AUTHORIZES CERTAIN TRANSFERS TO MINORS WITHOUT THE APPOINTMENT OF A CONSERVATOR, FOR PURPOSES OF POSSIBLE AMENDMENT; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. The following shall be codified as Section 93-20-433, Mississippi Code of 1972:

93-20-433. (1) Whenever a petition is presented to the court for approval of a settlement of a claim for a minor, the court, in its discretion, may elect to dispense with the formation of a conservatorship and authorize the petitioner to assume all responsibilities and powers that otherwise would be vested in a conservator under this article. At the hearing on the petition, the judge must investigate the facts of the case fully and be satisfied that the proposed sum of money to be paid to the minor under the settlement is a fair settlement amount of the claim and that the best interest of the minor is protected. The judge also must determine if a reasonable plan exists for the proceeds to be held or invested for the benefit of the minor. If a parent is present and part of the hearing, the parent must agree that the settlement proceeds belong to the minor and are to be used for the minor. When the settlement involves an amount deemed substantial in the court's determination, the court, in its discretion, may require the use of a structured settlement for the minor.

(2) A petitioner who receives a sum of money on behalf of a minor under this section must apply the funds only to the support, care, education, health and welfare of the minor, and the person may not derive a personal financial benefit from the settlement other than reimbursement for necessary expenses, subject to the approval of the court. Funds not immediately applied for these purposes must be preserved for the future support, care, education, health and welfare of the minor, and the balance, if any, transferred to the minor when the minor becomes an adult or is emancipated. The petitioner must adhere to the same standards of care of a conservator and the requirements of Section 93-20-418 and may exercise only those powers and duties granted under this article to a conservator or contained in the court order approving the settlement. A petitioner must seek the authorization of the court in exercising those powers granted to conservators under Section 93-20-414 unless the court, in its determination, waives the authorization requirement for specific powers enumerated in the court order approving the settlement.

SECTION 2. Section 93-20-431, Mississippi Code of 1972, is brought forward as follows:

93-20-431. (1) Unless a person required to transfer a liquidated sum certain under a banking provision, a contract for payment or under a judgment or decree of a court, or other property to a minor knows that a conservator for the minor has been appointed or a proceeding is pending for conservatorship:

(a) The person may transfer a liquidated sum certain or property of certain value not exceeding Twenty-five Thousand Dollars ($25,000.00) in a twelve-month period to:

(i) A person who has care or custody of the minor and with whom the minor resides;

(ii) A guardian for the minor;

(iii) A custodian under the Uniform Transfers to Minors Act, Section 91-20-1 et seq.; or

(iv) A financial institution as a deposit in an account or certificate solely in the name of the minor; notice of the deposit must be given to the minor; or

(v) An Achieving a Better Life Experience (ABLE) account.

(b) The person must seek chancery court approval if the sum of money or value of property that may be due to the ward is not a liquidated sum certain or property of certain value under a banking provision, a contract for payment, or under a judgment, order or decree of a court, and the chancery court before ordering the money paid or personal property delivered must fully investigate the matter and satisfy itself by evidence or otherwise that the proposed sum of money to be paid or property to be delivered because of any claim of the ward whatsoever, whether arising ex delicto or ex contractu, is a fair settlement of the claim of the ward and that it is in the best interest of the ward that the settlement be made or the personal property be delivered to the ward. Upon making that determination, the chancery court may order that the money or personal property be accepted by the ward and paid or delivered by the party owing the money or in possession of the property as authorized by the decree of the court, and compliance with the order shall acquit and release the person so paying or delivering the same. The person who receives the money or property of a ward under the order thereby becomes amenable to the court for the disposition of it for the use and benefit of the ward, but is not required to furnish security therefor absent order of the chancery court.

(2) A person that transfers funds or other property under this section is not responsible for its proper application.

(3) A person that receives funds or other property for a minor under subsection (1)(a) or (b) may apply it only to the support, care, education, health, or welfare of the minor, and may not derive a personal financial benefit from it, except for reimbursement for necessary expenses. Funds not applied for these purposes must be preserved for the future support, care, education, health, or welfare of the minor, and the balance, if any, transferred to the minor when the minor becomes an adult or otherwise is emancipated.

(4) Contributions to an ABLE account, and the provisions for permissible disbursements from such account, are governed by 26 USC Section 529A and the terms of the applicable ABLE plan. The amount of annual contributions is subject to 26 USC Section 2503(b).

SECTION 3. This act shall take effect and be in force from and after July 1, 2024.