While it can be daunting to plan for death, creating an estate plan is one of the most important things a person can do for themselves. Doing so allows the individual to be in control of what happens to their personal assets and belongings after they pass away. When creating an estate plan, an individual may want to set up trusts to manage their estate. A person who creates a trust is a “trustor,” while the person who benefits from the trust is a “beneficiary.” There is a third party who manages the trust, known as the “trustee.” A trust is essentially an arrangement that allows the trustee to take care of the assets on behalf of the beneficiary. In the state of New York, there are many ways a trust can be created.
Benefits of a Trust
Creating a trust is different than other estate planning options. Because a trust may avoid probate, it can be possible for a beneficiary to gain access to the trustor’s assets faster. Setting up an estate through a trust also saves the beneficiary from certain legal costs. Through a trust, a trustor can control their wealth by being able to decide who an estate is given to. This also allows a trustor to ensure their estate does not end up in the wrong hands after they pass.
Irrevocable vs. Revocable Trusts
There are many different ways for an individual to create a trust for a beneficiary. Figuring out what kind of trust to create depends on what the trustor is looking to leave behind as well as how much control they are looking to have over the trust. In the state of New York, there are two main types of trusts:
- Revocable Trust: This type of trust may be updated or terminated at any time without permission from the beneficiary, as long as the trustor is of sound mind to do so.
- Irrevocable Trust: This type of trust requires the trustor to give up their rights to the trust. This means they no longer have any ownership of the trust, taking away their ability to change or terminate the trust at any time.
Other Types of Trusts
While revocable and irrevocable trusts are the most common types of trusts that are created, there are various trust options available to individuals. Every trust comes with a different purpose, which is why it is important to seek legal counsel to guide you to your best option. The type of trust an individual creates may vary depending on who they are leaving the trust to in addition to what they are leaving them (money, a charity, etc). Other common trusts that people choose in New York may include:
- Asset protection trusts
- Life insurance trusts
- Testamentary trusts
- Charitable remainder trusts
- Charitable leads trusts
- Inter vivos trusts
- Supplemental needs trusts
- Special Needs Trusts
- Generation-skipping trusts
- Qualified personal residence trusts
Contact our Firm
If you wish to create an estate plan and are seeking a legal representative to guide you through the process, contact The Lauterbach Law Firm today.
The Lauterbach Law Firm is proud to serve clients throughout Rockland County who are faced with legal matters related to estate planning, real estate, foreclosure defense, landlord-tenant law, business law, and criminal defense. If you require the services of an experienced team of attorneys, contact The Lauterbach Law Firm today to schedule a consultation.