Children of any age can inherit under New York laws although they cannot manage their own money until they turn 18 years old. The inheritance can happen through a will or without a will. A parent or a grandparent can leave a bequest to a minor in their will. And, if a parent dies without a will, children are among the first on the list of heirs to an estate.
Exactly which children can be beneficiaries or heirs? Anyone living in the state of New York will do well to get an overview of the children's inheritance laws in New York.
Estate Planning with Children as Beneficiaries
Children can inherit property in New York. They are often are named in wills as beneficiaries by parents and grandparents. That's what generational wealth is all about, right? But there are no laws in the country or New York state that require parents to name their kids in their will and leave them property. In New York, parents can disinherit a child if the will contains clear and unequivocal language to that effect.
What does this mean for the child who is born after the will is drawn up and is therefore not named as a beneficiary? New York estate law terms this child an "afterborn" child, even if the birth occurred before the death. As long as the will did not specifically exclude the child as a beneficiary (explicitly disinheriting them), the afterborn child is entitled to split the inheritance with the other children in an equitable division.
Dying Without a Will in New York
If a person who dies in New York leaves a valid last will and testament, their estate will pass to the people named in the will, called the beneficiaries. If the person does not leave a valid will, they are said to die intestate, and New York's intestate succession law applies. These laws specify which close family members of the deceased person will take some or all of the estate when there is no valid will. The persons inheriting are termed heirs.
Children can be heirs under New York inheritance laws. In fact, the two familial relationships that top the list as heirs are children and surviving spouses. If there are no children, the surviving spouse generally takes 100 percent of the decedent's intestate estate.
If there are children but no surviving spouse, the kids are the sole heirs and the decedent's property is divided equally between them. (That means that if, for example, there are four kids, each gets 25 percent of the decedent's estate.) When there is a surviving spouse and surviving children of any age, the statute describes how the estate will be divided among them. This is a little more complicated.
Surviving Spouse and Children as Heirs
Surviving spouses in New York are entitled to more than half of the estate assets if the decedent dies without a will and has surviving children. The only exception to this rule is when the spouse entered into a valid prenuptial agreement that waived all rights to inheritance. In that case, the surviving spouse inherits nothing.
If there is no valid prenuptial agreement, a surviving spouse is one of the legal heirs. They are entitled to take $50,000 from the estate of the decedent, then one-half of the remaining estate assets. The remaining one-half of the estate assets pass to the decedent's children in equal shares. If for any reason the surviving spouse cannot inherit, the children take 100 percent of the estate divided equally between them.
Assuming that the decedent dies without a will and leaves an estate worth $650,000, this is the way it would be divided:
- Surviving spouse and no kids: spouse takes $650,000.
- Two children and no surviving spouse: each child takes $350,000.
- Surviving spouse and two children: spouse takes $50,000 plus one-half of $600,000, or $300,000; each child takes $150,000.
Which Children Are Counted?
Legally adopted children are given exactly the same rights as biological children in New York. They can be beneficiaries under a will and they also have full intestate inheritance rights. Step-children and foster children can be beneficiaries under a will, but they will not be heirs if the decedent did not adopt them. If the decedent dies without a will, stepchildren and foster children inherit nothing.
What about biological children who are conceived prior to the parent's death? That child can inherit under a will and is considered an heir with intestate rights to the estate.
Appointment of a Guardian
If a minor child inherits money, an adult must look after it for the child. New York law does not allow a child under the age of 18 to directly inherit and take control over assets, money or property. If a child is a minor when they become a beneficiary under a will or an heir through intestacy laws, the child cannot legally assume ownership of their share of the estate. Instead, an adult must be appointed as the guardian of the child's property to manage the money until the child turns 18.
If either parent is alive, they are usually given the job of guardian. If both parents are deceased, the court will usually appoint the guardian named in the will, if any. If the will doesn't provide for a guardian for the children, and both parents are deceased, the New York court appoints someone else, another family member, trusted family friend or, in the case of large estates, an attorney or bank to look after their interests. If no plans have been made to make certain that the money and property is appropriately managed on behalf of the child, the court will appoint a guardian for the funds.
The guardian owes the child a fiduciary duty to take care of the property and manage it in the child’s best interests. This is the highest legal duty that one person can owe to another. The guardian of the funds may be supervised by the court and required to account for their actions with the assets.
Non-Probate New York Inheritances
Note that even when a person dies with a valid will, not every asset passes via the will in the probate process. New York state laws recognize certain non-probate assets. These are assets that transfer ownership at death. Often this occurs through the designation of a beneficiary. For example, a person can name a beneficiary for certain bank accounts, investment or retirement accounts and life insurance policies. These assets automatically pass to the named beneficiary regardless of whether there is a will or not.
Real property can pass outside probate as well. This is usually accomplished by deed: the property is held by two people as joint tenants with the right of survivorship. This means that when one dies, the other is the sole owner of the property. When a New York married couple purchases a home in the state, it is usually deeded to them as a tenancy by the entirety. This means that it is held jointly, like in joint tenancy, and the spouses share an undivided 100 percent of the property. When the first spouse dies, the surviving spouse automatically owns the entire property.
This can effectively cut children out of inheriting anything. For example, if a parent dies with or without a will holding a primary residence worth $1 million, a life insurance policy worth $1 million and an investment account worth $1 million, the value of the holdings total $3 million. But if the property is held in tenancy by the entirety with the spouse, and the surviving spouse is named the sole beneficiary of the life insurance policy and investment accounts, the children inherit nothing when that parent dies.
Teo Spengler earned a J.D. from U.C. Berkeley's Boalt Hall. As an Assistant Attorney General in Juneau, she practiced before the Alaska Supreme Court and the U.S. Supreme Court before opening a plaintiff's personal injury practice in San Francisco. She holds both an M.A. and an M.F.A in creative writing and enjoys writing legal blogs and articles. Her work has appeared in numerous online publications including USA Today, Legal Zoom, eHow Business, Livestrong, SF Gate, Go Banking Rates, Arizona Central, Houston Chronicle, Navy Federal Credit Union, Pearson, Quicken.com, TurboTax.com, and numerous attorney websites. Spengler splits her time between the French Basque Country and Northern California.