Petitioner is the guardian of the property of Justin Michael C. [born 2004], having been appointed by order dated July 22, 2010. According to the petition, the infant's funds consist of approximately $1.2 million in the possession of the Comptroller of the State of New York in an interest bearing account of the New York State Retirement System (the "System"). These funds constitute the pre-retirement death benefits of the infant's maternal grandfather as to which the infant is the named beneficiary.

On December 3, 2013, on the guardian's petition, the court issued its order directing, inter alia, that the System pay over the entire fund to the guardian by a series of checks payable jointly to the guardian and various banking institutions. The order has not yet been implemented.

Following discussions with various financial advisors the guardian has concluded that it would be in the best interests of the infant if the funds were "rolled over" into one or more non-spousal inherited Investment Retirement Accounts (" IRA's"). Petitioner accordingly seeks a "more tailored" order in effect amending the court's order of December 3, 2013. Petitioner also seeks approval of the proposed investment of the IRA funds in bank certificates of deposit.

As a fiduciary, a guardian is charged with the proper stewardship of monies belonging to the infant until the infant attains majority. Generally speaking, the fiduciary "has a duty to invest and manage property held in a fiduciary capacity in accordance with the prudent investor standard defined by" EPTL 11-2.3, the "Prudent Investor Act." The prudent investor standard, inter alia, requires a trustee: "to pursue an overall investment strategy to enable the trustee to make appropriate present and future distributions to or for the benefit of the beneficiaries under [*2]the governing instrument, in accordance with risk and return objectives reasonably suited to the entire portfolio; . . . to consider, to the extent relevant to the decision or action, the size of the portfolio, the nature and estimated duration of the fiduciary relationship, the liquidity and distribution requirements of the governing instrument, general economic conditions, the possible effect of inflation or deflation, the expected tax consequences of investment decisions and strategies and of distributions of income and principal, the role that each investment plays within the overall portfolio, the expected total return of the portfolio (including income and appreciation of capital), and the needs of the beneficiaries (to the extent reasonably known to the trustee) for present and future distributions authorized or required by the governing instrument" (EPTL 11-2.3 [b] [3]).

Under these proscriptions, a typical IRA is not a suitable vehicle for holding the infant's funds because the monies belonging to the infant cannot be used by the infant when the infant attains majority without incurring a significant penalty. However, a non-spousal inherited IRA is different. As described in detail by Justice Sotomayor, speaking for a unanimous court in Clark v Rameker (134 S Ct 2242, 2247 [2014]),^[FN1] "the holder of an inherited IRA may withdraw the entire balance of the account at any time - and for any purpose - without penalty. . . ." (see also IRC

"If you are a designated beneficiary (other than a surviving spouse) of a deceased employee, you can roll over all or part of the eligible rollover distribution ... into a traditional IRA. You must make the rollover by a direct trustee-to-trustee transfer into an inherited IRA" (IRS Publication 590, at 26 [2014]). The court has found nothing in the applicable statutes, regulations or official publications to indicate whether or not the rollover from the pension fund may be made to multiple "inherited" IRA's, each a different trustee, though the quoted language in Publication 590 speaks in the singular.

Petitioner's request for authorization to roll over ^[FN3] the proceeds of the grandfather's New York state retirement account into an inherited IRA account is accordingly granted to the extent of a single IRA account as only one account is necessary. Mechanically, the funds should be paid out to the "trustee" of the inherited IRA account set up for that purpose. The guardian may choose the institutional trustee for the inherited IRA.

With respect to the nature of the IRA investments, these are within the discretion of the fiduciary subject to the provisions of the Prudent Investor Act (EPTL 11-2.3) and the trustee of the IRA account will invest the funds as directed by the owner of the account. Bank certificates of deposit may be an acceptable investment vehicle for the IRA funds with the caveat that they not mature after the date the infant is to attain his majority. The court will not provide instructions to the guardian as to the manner of investment.^[FN4]

Submit order in accordance with this decision.

EDWARD W. McCARTY III

Judge of the