Disclaimer: This article is for general informational purposes only and does not constitute legal advice. Consult a licensed attorney for advice about your specific situation.
Detailed Answer
Intestate Succession in New York
When someone dies without a will in New York, state law determines who inherits. Under EPTL § 4-1.1, a decedent’s assets pass first to the surviving spouse and children. A minor child inherits the same share as an adult child.
Appointment of an Administrator
The court must appoint an administrator to collect assets and distribute them according to intestate rules. Under SCPA § 1001, any interested person may petition the Surrogate’s Court for letters of administration. The administrator gathers funds, pays debts and distributes the remainder to heirs.
Guardianship of the Estate for a Minor
A minor cannot manage an inheritance. To protect those funds, the court appoints a guardian of the property under SCPA Article 17. The guardian must be a responsible adult, often a parent or other close relative. Key steps include:
- Filing a petition in Surrogate’s Court.
- Obtaining court approval of the guardian and any bond requirements.
- Filing annual accountings with the court to track expenditures.
Uniform Transfers to Minors Act (UTMA)
New York’s UTMA (EPTL Article 7, Part 5) lets an adult custodian hold assets for a minor. Under UTMA, you:
- Create a custodial account at a bank or brokerage.
- Designate a custodian to manage investments until the minor reaches the statutory age (18 or, if elected, 21).
- Avoid court-supervised guardianship and reduce administrative fees.
Blocked Accounts and Trust Options
If the estate has cash, the court can order the opening of a blocked account under Banking Law § 675. Funds stay inaccessible until the minor turns 18 or 21. Alternatively, family members can set up a testamentary trust within a will for future decay or create an inter vivos trust before death to protect assets and possibly lower administration costs.
Helpful Hints
- Act promptly: Petition for administration and guardianship soon after death.
- Choose the right guardian: Courts favor someone with financial experience and no conflicts of interest.
- Keep detailed records: Guardians must report all transactions in annual accountings.
- Explore UTMA: Compare cost savings against court guardianship fees.
- Consider trusts: A properly drafted trust can avoid guardianship and offer longer control over assets.