§ 8.01-76.How proceeds from disposition to be secured and applied; when same may be paid over.

This section governs what happens to money generated for a person under a disability, whatever proceeding produced it — a sale or lease suit under this article, a partition, or a condemnation. The proceeds of sale, along with any rents, income, or royalties, must be invested under the court’s direction for the benefit of the people entitled to the estate, and, where a trust is involved, subject to the terms of the instrument that created it.

The court carries ongoing responsibility for that money. It must take ample security for every investment, demand more security later if needed, and enter whatever orders are necessary to manage and preserve the invested property and protect the rights of everyone interested in it, vested or contingent. Even so, the court can direct the funds to the disabled person’s legally appointed and bonded fiduciary once satisfied the bond is sufficient, or apply all or part of the funds directly to that person’s needs at any time. And when the funds fall at or below the threshold set in § 8.01-606(B), the court may skip the fiduciary and pay an appropriate person directly for the disabled person’s benefit, wherever that person lives; funds handled that way are treated as personal property.

A second, later-added provision lets the court order the funds moved into a special needs trust as defined in § 64.2-779.10, either on the fiduciary’s request, the guardian ad litem’s request, or the court’s own motion.