Q: My spouse died with a Will that leaves assets to our daughter, but she is a minor – what do I need to know about managing her inheritance?
A: When a person under the age of 18 is set to receive more than $10,000.00 as an inheritance under an estate, the New York Surrogate’s Court requires that a guardian be appointed to protect the minor’s property interest. Though a child’s parents are, by default, considered the natural guardians of her person, they do not have the right to control their child’s inherited property.
In these cases, the Court must appoint a guardian of the property to protect and preserve the infant’s assets until the child comes of age.
While any adult with an interest in the child’s welfare may ask the Court for permission to serve as a property guardian, the Court typically prefers for a parent to act in this role – though the Court will prioritize the best interests of the child. The person who intends to act as guardian must submit a Petition to the Surrogate’s Court in the county where the child resides.
In this Petition, the proposed guardian will provide certain details about the minor: where she lives, what her assets are, and the name of any person who lives in the same household as the child.
The proposed guardian must also obtain jurisdiction over the child’s parents, if they are alive and their residence is known. This jurisdiction typically comes in the form of a waiver signed by the parent, consenting to the appointment of a guardian. If the child has no surviving parents, then service must be made upon her grandparents, if they are alive, or the persons who have custody of the child.
If the child is over the age of 14, she must be served as well.
Once the Petition is filed and jurisdiction is complete over all parties, the Court will review the documents to ensure that the appointment is in the child’s best interests. If the Court is satisfied with the documents, the newly-appointed Guardian of the Property must collect the minor’s inheritance and deposit any money into a joint account with the Clerk of the Court. These funds cannot be withdrawn without sufficient cause or an Order from the Court. The Guardian has a fiduciary duty to prudently maintain assets, manage investments, and account to the Court as necessary.
In many cases, this extensive Court process is not avoidable. However, an effective estate plan may include a trust for the benefit of a minor child with a designated Trustee. Whetherthis trust is part of a Revocable Trust, or a Testamentary Trust established under a duly executed Last Will and Testament, establishing a separate fund for the benefit of a child as part of your estate plan will eliminate the need to involve the Court in managing these assets.
By Britt Burner, Esq. and Frank Oswald, Esq.
Frank Oswald, Esq. is an associate attorney at Burner Prudenti Law, P.C. focusing his practice areas on Trusts and Estates. Britt Burner, Esq. is the Managing Partner at Burner Prudenti Law, P.C. focusing her practice areas on Estate Planning and Elder Law. Burner Prudenti Law, P.C. serves clients from New York City to the east end of Long Island with offices located in East Setauket, Westhampton Beach, Manhattan and East Hampton.