View
218
Download
1
Category
Preview:
DESCRIPTION
Revocable living trusts are something everyone should understand before they go into the estate planning process.
Citation preview
LIVING TRUSTS
IN NEW YORK Revocable Living Trusts Are Something
Everyone Should Understand Before They Go Into the Estate Planning Process
ANTHONY J. MINKO New York Estate Planning and Elder Law Attorney
Living Trusts in New York Minko Law Office 2
As an essential tool in almost every modern estate plan, revocable living trusts
are something everyone should understand before they begin the estate
planning process. Sometimes simply known as living trusts, or alternately as
Inter Vivos trusts, these estate planning tools provide numerous benefits that
other tools do not. They are easy to make, relatively simple to use, and though
they require a little extra work on your part, the effort you put into them will be
well worth it when it comes time to distribute your estate.
Today we’re going to look at revocable living trusts so you can familiarize
yourself with some of their most important qualities.
THE LIVING TRUST
The term “trust” is one that many people have
heard, though few people know much about.
When we talk about trusts in estate planning we
are referring to a type of legal entity. You can
think of a trust as a company or a corporation.
Though the company only exists on paper, the
law gives that company some significant rights,
such as the ability to own property. The property
the trust owns will come from you. Essentially, you will create the living trust,
transfer some or all of your property to it, and then use the trust as a kind of
holding company that is solely responsible for managing your property in the
way you choose.
Living Trusts in New York Minko Law Office 3
When you create a living trust you create a type of legal entity. This entity is
designed to work in your benefit and will have to operate under the rules you
choose to impose. When you create a trust you become known as a trustor,
settlor, or grantor.
It’s important to keep in mind that a revocable living trust is but one kind of
trust. There are many different kinds of trust, each of which is designed to serve
a particular purpose. A revocable living trust is so named because you, as the
person who creates it, has the right to revoke or modify it whenever you like. It’s
also called a living trust because you create it to take effect during your lifetime.
Trusts that take effect only after you die are known as testamentary trusts.
CREATING YOUR LIVING TRUST
Just like other estate planning tools, a living trust is a device that you are not
obligated to create. But in order to create a living trust in the state of New York,
you must be a mentally capable adult. Upon deciding to create the trust, you
must do so in writing and make sure that the document you create complies with
New York law.
PEOPLE IN YOUR TRUST
The document in which you create, known as the trust instrument, will have to
contain several specific details. These include:
The Trustee. The trustee is the person or organization you appoint who
will have the responsibility of managing the trust. Most people who create
Living Trusts in New York Minko Law Office 4
revocable living trusts in the state of New York choose to serve as the
trustee themselves. Although you can appoint another person or
organization to manage your trust, living trusts are usually very easy to
manage because they simply own your property.
The Beneficiaries. The beneficiary of the trust is the person or
organization who gets to use or benefit from the property the trust owns.
The person who creates a revocable living trust is also usually the
beneficiary. However, you also need to name beneficiaries who stand to
inherit your property after you are gone. This naming of inheritors is the
primary reason why people create a revocable living trust. We will discuss
this a little more depth later on.
The Terms. The revocable living trust will also state any terms or
conditions you want to include. At the very least, you’ll need to name a
successor trustee who will be able to take over managing the trust should
the original trustee die or no longer be able to perform his or her duties.
Successor trustees are important because, for example, after you die
someone will have to step in and determine who inherits the trust
property. In this situation, the successor trustee will be responsible for
taking living trust property and distributing it to the inheritors you
identified.
Living Trusts in New York Minko Law Office 5
PURPOSES OF THE TRUST
The reason creating a living trust is so popular is because it helps your estate
avoid probate. Probate is the legal process that applies to any property you leave
behind after you die. In New York, such property will have to go through the
probate process in a New York Surrogate’s Court. That process often takes a
long time, an average of a year in New York, and can cost a lot of money. The
probate process may deplete your funds that you had worked hard for, to pass
on to the next generation. But there is an alternative—a living trust avoids this
process altogether.
When you create a living trust and transfer your property into the trust’s name,
the property you own as an individual is no longer technically yours. Instead, it
belongs to the trust. After you die, the trust will still remain as a legally
recognized entity. Because you created the trust and determined what the trust
must do with the property it owns after you are dead, the trust can therefore
distribute its property outside of probate. So, because you use a living trust to
distribute your property, you avoid probate as long as the living trust owns
everything you own. Of course, in many instances there are other considerations,
but we will cover that in our next discussion about living trusts.
LIVING TRUSTS AND YOUR ESTATE PLAN
Though they sound relatively simple, living trusts are not something most people
can create and use on their own. Like every other piece of a good estate plan,
your living trust will have to work hand-in-hand with other tools. To better
Living Trusts in New York Minko Law Office 6
understand how this process works, you should contact our offices and make an
appointment to discuss living trusts in more detail.
About the Author
Anthony J. Minko
As an attorney in private practice in Brooklyn, New York,
Anthony J. Minko provides a wide range of estate planning
services to clients throughout the New York City area. Mr.
Minko creates customized estate plans that enable families to
preserve their wealth and provide for the security of their
loved ones both during and after their lifetime. He dedicates
himself to informing the public of the need for careful
attention to their specific situations, regularly presenting
educational seminars addressing the growing importance of estate planning.
Before forming Minko Law Office, Mr. Minko spent over four years as a trial
attorney handling civil and commercial litigation in New York state and federal
courts. He also served the senior community as a member of Wells Fargo Bank
and the New York City Law Department. Mr. Minko is a member of the American
Academy of Estate Planning Attorneys, The National Academy of Elder Attorneys,
and several local and state bar associations.
Minko Law Office
1766 Cropsey Avenue
Brooklyn, NY 11214
Phone: (718) 238-1727
Fax: (718) 971-1059
www.MinkoLaw.com
Recommended