Trusts are extremely useful estate planning and wealth preservation tools that can benefit people of all economic conditions. Because they are often not well-understood by non-lawyers, however, many people fail to take advantage of creating a trust when they easily could. The following are some of the most common questions we hear about trusts in New York. For more information about your specific situation, call our office today to schedule a consultation with an attorney.
What is a Trust?
A trust is an arrangement in which one party holds property for the benefit of someone else. The parties involved in a trust are as follows:
· The Grantor – The grantor (sometimes called the settlor or donor) is the party who provides the trust assets.
· The Trustee – The trustee is the party that holds the assets for the benefit of a third party.
· The Beneficiaries – The beneficiaries are the parties for whom the assets are held
In New York.
A living trust is a trust that is created while a person is still alive (as opposed to a testamentary trust that is created by a person’s will to transfer property when he or she passes away). In a living trust, a person is typically both the grantor and the trustee of the trust, which means that he or she can continue to manage and use the assets in the trust during his or her lifetime.
What are the Estate Planning Benefits of Placing Your Assets into a Trust?
One of the main benefits of placing your assets into a trust is avoiding probate. When you pass assets through a will or as a result of the laws of intestate succession, they need to go through a legal process known as probate, which can be time-consuming and expensive. When you place assets into a trust, however, they transfer directly to beneficiaries without any court intervention.
How Do You Form a Living Trust?
To form a trust in New York, you have to create a trust document, sign it in front of a notary, and transfer your property to the trust. While this may sound simple, in reality, it's imperative that you enlist the assistance of an experienced attorney when creating a trust. Any errors you make in the trust documents could have significant consequences, including the trust being declared invalid by a court when it comes time to transfer assets to your beneficiaries.
Do I Still Need a Will if I Have a Trust?
A living trust is just one part of a comprehensive estate plan, and you should definitely also have a will to account for assets you may forget to transfer to your trust and to plan for the guardianship of any minor children (something that a trust cannot do). There are several other estate planning documents you should execute as well. For this reason, it’s critical that you consult with an estate planning lawyer about your estate plan.
Call Us Today to Speak with a New York Estate Planning Attorney
If you are considering forming a trust or doing anything else related to your estate plan, you should speak to an attorney immediately. For more than 35 years, Charles Leonard Mitchell, Esq., has been helping clients with a variety of legal needs. To schedule a consultation with Charles Leonard Mitchell call our office today at 646-670-8977 or contact us online.