Many New Yorkers own real property in multiple states. It is common for a New…
When we pass away, we often want our assets to be collected by our loved ones as quickly and easily as possible. When settling an estate, an asset with a designated beneficiary will pass outside of probate and directly to the named heir regardless of the terms of your Last Will and Testament. Upon your passing, the beneficiary can inherit the proceeds of your account without the need to involve the Surrogate’s Court (probate).
Designating a beneficiary can be a quick and cost-effective way to transfer an asset and avoid probate. However, there are instances where you may want a loved one to inherit an asset, but it is not advantageous to designate that loved one as a beneficiary. For example, a minor should not be named as a beneficiary. A New York estate attorney or probate attorney will explain that naming the minor as a beneficiary can avoid probate, but the cost of collecting the asset for the minor could be significant.
Also, a minor can’t hold legal title to property. When settling an estate in New York, if a minor receives money over $10,000, a petition for guardianship of the property must be filed with the Surrogate’s Court. Therefore, an individual, even a natural parent, would need to petition the court to be named as the guardian of the minor’s property so the asset can be collected. The guardian of the property will safeguard the money for the benefit of the minor until they reach the age of majority (age 18 in New York). The assets are jointly controlled by the Surrogate’s Court and the guardian of the property. A guardianship proceeding can be expensive, and the court will be involved until the child reaches the age of majority.
Similarly, if a loved one has special needs and is receiving needs-based government benefits, like Medicaid or Supplemental Security Income, their share of the inheritance could make them ineligible to receive those benefits. In this case, it may make more sense to use estate planning trusts.
Accordingly, designating a beneficiary may not be the most advantageous way to avoid probate. Before determining heirs, it is important to consult with and retain an experienced estate planning attorney or probate attorney to make sure your wishes are carried out. The New York estate attorneys at Russo Law Group, P.C. are experienced in comprehensive estate planning strategies. We are happy to assist you when making decisions about beneficiaries and estate planning trusts for your specific needs. Please contact our law firm to speak with a qualified elder law and estate planning attorney to tailor a long-term care protection plan for you or your loved one.