New York City Trust Lawyer

New York City Trust Attorney

You have spent your lifetime building wealth through sacrifice and hard work. Now, you want to ensure this wealth is left for your beneficiaries and is protected from potential legal claims or taxes. To do this, you need a New York City trust lawyer who can help you create a plan.

What Is a Trust?

A trust, also called a living trust, is an estate planning tool created by you (known as the grantor) to manage and safeguard your assets while you are alive and to specify their distribution after your death. Trusts are a common component of estate plans, offering benefits like asset protection and probate avoidance. An NYC estate planning lawyer can help with this.

When creating a valid trust, there are requirements that must be met. In New York, these requirements are governed by the Estates, Powers, and Trusts Law (EPTL) and include:

• The grantor must be at least 18 years of age and have the legal capacity to understand what they are doing.
• The grantor must clearly express their intention to create a trust.
• The trust must be an identifiable property or assets such as real estate, personal property, cash, or securities.
• A trustee must be named, and the terms of their appointment must be included in a trust document.
• The trust must have definite beneficiaries.
• Every lifetime trust in New York must be in writing and signed by the grantor, trustees, witnesses, and notarized.

Common Types of Trusts in New York

Most well-rounded estate plans include trusts, typically revocable and irrevocable trusts.

Revocable Trusts

The most common choice for New Yorkers is a revocable trust. These offer significant flexibility and allow the grantor to retain the right to dissolve, amend, or change its terms during their lifetime. However, these powers are terminated upon the grantor’s death. While living, the grantor can modify the beneficiaries, manage the trust’s assets, and add further assets to the trust.

Irrevocable Trusts

Unlike revocable trusts, irrevocable trusts can’t be altered once established. The ownership of assets within the trust is transferred from the grantor to the trustee. If any changes need to be made, the grantor needs the trustee’s consent and any beneficiaries or a court order.

Special Needs Trusts

Special needs trusts (SNTs) are designed to help family members with disabilities maintain their eligibility for essential government benefits like Medicaid and Supplemental Security Income (SSI) while still having access to family funds. New York has two primary types of SNTs: self-settled or first-party trusts and third-party trusts.

Charitable Trusts

A charitable trust is established to benefit a charity of choice by the grantor. They allow grantors to donate assets while they are alive, potentially receiving tax benefits, such as income tax deductions or reduced estate tax burdens, with the principal remaining passing to the charity upon the grantor’s death.

The Benefits of Trusts in New York

Trusts are beneficial tools for those navigating estate planning and asset protection and include several benefits.

Avoiding a Lengthy and Costly Probate Process

Going through probate can be an overwhelming thought for many people. When a grantor puts a trust in place before they pass away, they could help their family avoid a lengthy and costly probate process. The costs can add up quickly, from court and filing fees to attorney fees, executor compensation, etc. The average cost of probate in New York is 5-7% of the estate’s value.

The key to avoiding probate with a trust lies in the fact that assets held in a properly established and funded trust are not considered part of the grantor’s probate estate. Since the trust legally owns the assets, they are passed directly to the beneficiaries as per the trust agreement, without court intervention.

Trusts Are Private

Unlike wills, trusts do not require public filings with the Surrogate’s Court. Once a will is submitted, it becomes a publicly accessible document. This allows any interested party, such as anyone excluded from the will or a creditor, to contest the contents. When a trust is used, no probate documents need to be filed, and only trustees and beneficiaries will be aware of what is in the trust.

Trusts Provide the Grantor Control

Trusts offer a versatile approach to asset distribution and allow the trustee to manage assets after the grantor has passed. The grantor can choose between simple transfer instructions or establish specific conditions and protections for disbursement. These conditions could be that the trust won’t be passed until the beneficiaries are of a certain age or until they have earned a college degree.

The Trustee Is Held Accountable

One of the major worries for grantors is that a trustee may mishandle their assets. Many trusts have a stipulation that trustees provide beneficiaries with an annual accounting. This could be as simple as providing monthly bank statements alongside a spreadsheet that summarizes all transactions. The grantor could also incorporate a requirement for periodic external audits to offer an extra layer of assurance.

Your Loved Ones Will Be Provided For

Trusts can serve as a valuable tool for ensuring your loved ones are provided for, especially those with special needs, young children, or ones who may lack financial literacy. They allow for the creation of a structured system for their future care and maintenance.

How Can a Trust Lawyer Help Me?

In New York City, if you are contemplating creating a trust, it can be helpful to seek the advice of an attorney who is knowledgeable in this area of law. Trust lawyers understand the formation and ongoing management of trusts and can assist with the correct drafting and funding procedures. While an at-home approach to setting up a trust is an option, having a lawyer can ensure everything is legally sound.

Especially if you have a unique situation like:

• You have a child with special needs.
• Your estate is close to the estate tax exemption of $7.16 million.
• Your estate has complex or substantial assets.
• You have a complex family dynamic.
• You want to include complicated conditions for how your beneficiaries will receive the assets.
• You need advice on which trusts will work for you or about how to fund them.
• You own a business.
• You want to leave assets to charity.

Even after you have passed away, your trust lawyer can make sure your assets are properly protected and that your wishes are carried out.

FAQs

Q: Can Trusts Help You Avoid Probate?

A: Yes, trusts can be an extremely effective tool for helping a family avoid probate after a loved one passes away. Assets such as real estate, bank accounts, investment accounts, vehicles, personal property, and life insurance policies can be held in a trust. Once they are in a trust, they are owned by the trust and not by your estate, so they will not be subject to probate.

Q: Can I Change the Terms of My Trust?

A: This depends on whether the trust is revocable or irrevocable. Revocable trusts are generally amendable, and the grantor has the power to change them or even revoke them during their lifetime. On the other hand, irrevocable trusts require the consent of the grantor, trustees, or any beneficiaries. The grantor may petition the Surrogate’s Court in New York to modify an irrevocable trust if there were any mistakes, changes in circumstances, or tax law changes.

Q: How Do I Know Which Types of Trusts Fit My Needs?

A: To choose the right type of trust to fit your needs, you have to understand your personal circumstances, financial goals, and the needs of your beneficiaries. Understandably, you might be unsure where to start, so reaching out to an experienced estate planning attorney will be a smart option. They can educate you on specific laws and regulations, analyze your situation, and guide you through the entire process.

Q: Who Can Act as a Trustee?

A: New York allows individuals who are 18 years of age and of sound mind, and corporations like banks and trust companies to act as trustees. It is also possible to have multiple trustees who share the responsibilities of administering the trust, as well as naming successor trustees who can step in if the initial trustee is unable or unwilling to continue serving.

Q: How Does New York Estate Tax Apply to Trusts?

A: New York estate tax will apply to revocable trusts because they are included in a deceased individual’s taxable estate, even though the assets are exempt from probate. For irrevocable trusts, if they are properly structured, it can mean the assets are not counted within the taxable estate. The potential tax implications will depend on the type of trust, its terms, and what powers the grantor still has.

Meet With a Skilled Trust Attorney in New York City

Are you considering a living trust for your estate plan to ensure your assets are managed according to your wishes and, hopefully, to avoid probate? The experienced attorneys at Greco Law are available to assist you with navigating this process. Reach out to us to schedule a meeting with our team so we can discuss your unique needs.