Even though most people think about wills when they think about estate planning, there are many other tools available which are just as if not more effective to use. One of the most common devices used is called a trust. Essentially, a trust is a device that allows individuals to control the distribution of their property during and after their lives. And not all trusts are created equally. There are many different kinds of trusts and many purposes for their creation. But only a trained New York City probate attorney can evaluate you and your loved one’s needs to accurately assess which type of trust is most beneficial and helpful for your circumstances.
As a preliminary matter in New York, a trust by default is irrevocable. Meaning, once the trust is created it is incredibly hard to terminate it without the consent from all beneficiaries. The issue here is that, if the beneficiaries are incompetent or minors, a guardian may not issue consent on his or her behalf. Thus, the will would need a court order—something judges are very hesitant to do.
This is a danger of using an inexperienced and young attorney who does not know that a trust is irrevocable by default. A more experienced New York City probate attorney will know that you can simply state the trust is revocable to preserve the control within the grantor (the person who makes the trust).
Even though it immediately sounds like you would never want to have an irrevocable trust, this is not always the case. Having an irrevocable trust will take some of your assets out of your estate for tax purposes whereas a revocable trust will not!
One of the more common types of trusts is called a testamentary trust. This is a trust that is created through your Last Will and Testament. Upon the testator’s death—the creator of the will—the assets of the will pass to the trust. Most of the time, the trust is funded by the residuary of the will, which is the pool of all unassigned or bequeathed property in the testator’s estate. The major advantage of a testamentary trust is that it is amendable and revocable at any time during the testator’s lifetime. However, upon the death of the testator, the trust is irrevocable.
The counterpart to a testamentary trust is called a living trust. As opposed to a testamentary trust which is in the will, a living trust is made separately and during the life of the grantor. This type of trust is where a trustee holds legal title to property of the beneficiary according to the instructions of the grantor in the trust document.
Sometimes an individual wants to make a charitable trust. These types of trusts are established to benefit a certain charity or for the general public at large. You may ask why you would want to use a charitable trust and not just give the amount outright. The answer is to help you or your loved one’s estate avoid taxes by dropping the amount of taxable property into a lower level. Moreover, many individuals who have worked at a long time for an organization, business, or school typically like to set up charitable trusts to support such program after death.
Trusts are complicated and can get costly when you retain an inexperienced New York City probate attorney. This is why it is essential that you retain an efficient and experienced New York City trusts attorney.