What is a Custodial Account?
The simplest way for a minor to inherit property is in a custodial account. A custodial account is an account that is established as a bank or a brokerage account, for the benefit of the minor to a certain age, often 21 or 25. What's so great about custodial accounts is that they are free to establish and easy to administer. You don't need a court's supervision, or the extra hassle of creating a separate trust, with it's own tax identification number and need for an annual accounting.
A well-drafted Will or trust will have, often in the back sections under powers of the executor or Trustee, a blanket provision that says something like the executor or Trustee has the power to distribute property to a minor to that beneficiary's custodian under the Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) of any state in which that minor lives.
If you find language like that, all you have to do is have that child's parent open up a custodial bank or brokerage account and then distribute the money to that account. Click here to find out how property can be inherited by minors in New York, as well as the specifics for how custodial accounts can be established.
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Each state has its own rules about probate. Find out how they do it in New York.