When leaving assets to your minor children, it is important as a parent to consider your available options to be sure they are properly provided for. When money and property is distributed to minor children, how their inheritances will be distributed can be overlooked. New York inheritance laws will determine how your estate is distributed to your children. Minor children are prohibited from directly inheriting and taking control of the money and property left to them. If your children are minors when money or property is left to them, they cannot legally assume ownership.
Many parents believe that a simple will is all they need because they can appoint a guardian for their minor children but how your children’s inheritance will be managed can be overlooked. Many parents prefer that their children receive their inheritance gradually at certain ages because they may not be able to effectively manage large sums of money in a responsible way. Once your children become adults, New York Law requires that their inheritance be paid to them in one lump sum.
Testamentary Trusts
A good way to leave your assets to your minor children is by using trust. You can create trust in your will, called a “testamentary trust”. A testamentary trust will allow you to name who you want as trustee to manage your children’s inheritance instead of having the court appoint a guardian for you. A testamentary trust however will come into existence only after your death and will go through probate. Probate in New York can cause delays and expenses that could affect the amount available for your children and the details of your trust will be made public during the probate.
Revocable Living Trusts
The better way to leave assets to minor children is to use a revocable living trust that will provide additional benefits and protection for your family. A revocable trust becomes effective at the time you create it. You can manage how your children receive financial support while you are still alive and manage their inheritance when you become deceased.
A major benefit of your revocable living trust is that you can maintain control during your lifetime, to change your trust if your family dynamics change and avoid probate. The proceeds of the trust will be distributed to your beneficiaries privately, when you want and the way you want, without court intervention.
Medicaid Asset Protection Trusts
A Medicaid Asset Protection Trust will allow you to transfer assets into an irrevocable asset protection trust, protect your assets from being used for Medicaid and long-term care costs, and preserve your assets for future generations.
Estate Planning is for you and the people you love. Your trust is the ideal way to distribute your estate to your children and give you control over how and when your trust funds will be distributed. The Ventre Law Office will create an estate plan designed especially for you.