Minors And Inheritance Of Property In New York
For some, estate planning is all about ensuring that their children are well taken care of when the parents pass away. When putting an estate plan together, parents may expect that the children will be adults before they can inherit. However, if the parents have young children, it is advisable to plan for the possibility of the children inheriting while they are still minors.
Leaving property to minors can be difficult if it is not handled properly. New York law does not allow minor children to legally assume ownership of any property left to them in a will or inherited through intestacy. This means that if a child is to inherit property, it has to be managed or controlled by a competent adult. If an adult has not been selected by the parents, the court has to appoint a guardian or custodian over the inherited property.
Instead of leaving property directly to a child, parents can also use trusts. Parents can also choose to transfer property to minors pursuant to the Uniform Transfers to Minors Act. When property is left to a trust for the benefit of the child, the property is legally owned by the trust. The trustee, an adult selected by the parents creating the trust, manages the trust property for the benefit of the children.
The person who is selected as a trustee over a child’s inheritance does not necessarily have to be the person the parents select to be a guardian over the child in general. However, selecting a person who can serve both roles can simplify matters for the child and the guardian. The trustee plays a very important role in ensuring the child’s inheritance lasts as long as possible. While the trustee has a fiduciary duty to ensure the trust property is invested reasonably, the parents can also include other limitations when setting up the trust to further control the kind of investments the trustee can invest the trust assets in.
If parents choose to use a trust to transfer property to their children and are concerned about the children having access to large amount of money while still young, the parents can set up conditions in the trust related to how the money is released to the beneficiaries. For example, the parents could provide for a portion of the trust income from investments to be released to the children or those caring for them for a period of time, with the bulk of the trust property to be released when the children reach a certain age.
Contact an Experienced Estate Planning Attorney
Estate planning with minors in mind can be complicated. If the proper arrangements are not made, the court may end up appointing a guardian that the parents would not have approved of had they been alive. In order to have some control over the appointment of the person who will control your children’s wealth in your absence, you should consult with an experienced estate planning attorney. For more information, contact a knowledgeable estate planning attorney at Meyer & Spencer, P.C., an estate planning firm with offices in Pleasantville and Mahopac, New York, serving Westchester and Putnam Counties.