Safeguarding a Minor’s Inheritance in New York
Most people understand that having a Last Will and Testament (a “Will”) leaves a plan for their wishes after death, but few realize one of its most important benefits — if drafted properly, a Will can avoid the need for a separate court proceeding to have a guardian appointed for a minor when a minor inherits under a Will. It is important to understand that while a parent is automatically the legal guardian of their child, a parent is not automatically the legal guardian of their child’s inheritance under a Will unless the parent has been formally appointed as guardian by the court or has been designated as the guardian of the property in a legal document such as a Will.
Under New York law, if a beneficiary in a Will is under the age of 18 and is entitled to receive more than $10,000, the law requires that a guardian of the minor’s property be appointed by the court to manage those funds until the child reaches adulthood, absent the Will providing otherwise. This process can lead to delays and additional legal fees in the settlement of an estate, and ongoing court involvement over how the funds are invested and spent will be required.
A properly drafted Will can help avoid this unfortunate result. Through a Will, a trust can be created for the benefit of a minor which can provide clear instructions for how a minor’s inheritance should be held, managed, and distributed. A trusted individual, known as a trustee, can be named in a Will. The trustee’s job is to oversee the minor’s funds and ensure they are used responsibly for the minor’s education, health, and support. Providing for the creation of a trust and naming a trustee for a minor beneficiary in a Will can avoid the need for a separate court proceeding to have a legal guardian appointed for the minor.
Without a Will, a family may be forced into unnecessary court proceedings, incur avoidable expenses, and lose control over how and when a minor’s inheritance is managed. Thoughtful estate planning can help ensure a minor’s inheritance is protected and managed according to your wishes.
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