New York residents may think they need a will, but they might want to consider setting up a revocable trust as well. A revocable trust has a number of advantages over a will for managing most of an individual’s assets. Probate of a will can be expensive and time-consuming, and a revocable trust can prevent that. Furthermore, a co-trustee of a revocable trust can handle the administration if the grantor becomes incapacitated.
A trust gives the grantor greater control over the estate. It can protect assets from creditors of the beneficiaries. It may also protect assets in case a surviving spouse remarries and ensures that those assets will go to the children from the earlier marriage and not to the new spouse’s children. The grantor can also use it to specify how assets are distributed to beneficiaries. For example, if the grantor wishes to specify a certain age or other conditions for the beneficiaries to receive distributions, a revocable trust can be used for this.
A trust may help heirs avoid taxes from retirement accounts as well by naming the trust as the beneficiary . A revocable trust also gives its owner the control to make changes to it as needed.
Trusts can be complex, and people may need to create a will and other documents as part of a complete estate plan. For example, a person may wish to make an advance medical directive that specifies instructions for end-of-life care. Because precision of legal language is important in these types of documents, an attorney may be helpful. An attorney may also be able to provide guidance regarding the best vehicles for what the client wishes to accomplish. People should review their estate plan periodically to ensure that it remains current with changes in their family and with any changes in applicable law.
Probate courts in New York determine the distribution of assets belonging to people who died without a will, and they are guided by the state law of intestacy. The court will apply by default the basic inheritance rules established by the state. When people prepare an estate plan, avoiding probate is often one of the goals because of the cost, lack of privacy and length of time that the process often entails.
In general, assets will be divided equally among a person’s surviving children if the decedent’s spouse has also passed away. Any creditors that may have claims upon one or more heirs could now go after the inheritance . Because the wishes of an intestate person cannot be known by a probate court, no considerations will be given to the character of heirs, who might be irresponsible with money or too young to make wise decisions. If a special needs person inherits assets, the alteration of the person’s financial status could suddenly disqualify the individual for essential government assistance programs.
Estate planning with trusts offers people the legal tools to potentially avoid negative consequences like this. Instead a trust can receive assets and then administer them according to the wishes of the person who created the estate. Trusts also provide people with control while still alive, which contrasts with the risks associated with giving heirs joint tenancy of assets.
A surviving spouse who is grappling with the administration of the decedent’s estate may want to obtain the assistance of an attorney who has experience with these matters. In many cases, the attorney can provide advice regarding the client’s responsibilities regarding the distribution of assets and other issues.
As some New York residents may already know, having a will helps to protect one’s family and assures that beneficiaries the decedent chooses receive assets. There are other ways, often used in conjunction with a will, to allocate some assets after death. Learning about specific transfer methods will enable grantors to distribute assets as they see fit without the need for probate.
Transfer on death is one way of transferring assets. In 1989, the Uniform TOD Securities Registration Act was enacted and allows registered securities to be transferred without probate. In this type of asset transfer, the individual maintains control of the securities until his or her death. The beneficiary needs only an ID and a death certificate to assume ownership of the transferred assets. Other than securities, some states allow for transfer of motor vehicles, deeds for real estate and bank and retirement accounts. Such transfer designations may be changed at any time. Giving someone a power of attorney may help if the transferor becomes ill, and the assets meant to be transferred need to be sold.
Another type of asset transfer is when property or other assets are owned by two individuals. Ownership is written in a format that specifies survivorship designation. In such cases, a death certificate and an ID is all that is needed for the transfer.
Having life insurance is another way to ensure a beneficiary is provided for without probate. The person who purchases life insurance names a beneficiary who will receive the insurance benefits directly. It is important to review life insurance beneficiary designations on a routine basis.
Consulting an attorney when determining how one’s heirs will inherit is important. The attorney will help by structuring an estate plan that incorporates different ways to provide for family and friends.
When New York residents are going through the estate planning process, they often decide to leave money to designated beneficiaries. However, those who are leaving money to future generations may wish to control how that money is spent. For instance, a parent may not want an inheritance used to support a political candidate or cause that he or she disagrees with.
Perhaps the best way to restrict how an inheritance is spent is to create a trust . The trust may contain restrictive language as long as it doesn’t break the law. It may allow a parent to stipulate, for example, that money given to a child after the parent passes away is only used to make rent payments or used to pay for college tuition. Doing so may sufficiently limit how the money is used without running afoul of free speech or any other laws.
While it may be possible for an individual to exert some control over his or her money after death with a trust, there are still limitations. For instance, the beneficiary can use personal funds to support a political cause or any other cause that a parent or anyone else doesn’t agree with. Those who study estate planning issues say that part of letting go is understanding that it is impossible to change a person’s attitude regardless of the limitations put in place.
Creating a trust may have many benefits for both the grantor and for the beneficiaries. A trust may avoid probate , which may help settle the estate in a timelier manner. Furthermore, the contents of the trust may be kept out of the public record, which may help protect a family’s privacy. An attorney may be able to help a client create a trust or to conduct a periodic review of an existing one.