During their lifetime, people frequently create estate plans so that they may prepare for what will happen to their assets after their death. One way that this is done is through the creation of a trust. The trustor sets this up so that a beneficiary may receive it. A trust is an arrangement that gives another individual, known as the trustee, the right to handle the assets on behalf of the beneficiary.
It is important for the individual creating an estate plan to understand the different types available to them. Every type of trust serves a different purpose depending on the situation at hand. This allows the trustor to create a trust that is specified for the person or entity that will receive it. An experienced attorney can assist them during this process to ensure that they are forming the right trust for their desires.
One of the two popular trusts that are made in New York is a revocable trust. This trust can be modified, changed, or terminated at any time during the trustor’s life. It is important to know that this can be done without the permission of the beneficiary, as long as the trustor is of full mental capacity to do so.
The other of the two frequently created trusts is an irrevocable trust. This requires the trustor to give up their rights to it when it is created. Once this is done, the individual no longer has any right to the trust. This means they cannot make any changes or terminate the trust at any point.
Irrevocable Life Insurance Trust
This allows the trustor to take their life insurance out of their estate. With this, the beneficiary may be free from any taxes that are placed on the trustor’s life insurance policy in the estate.
There are two types of charitable trusts. A charitable lead trust allows the individual to choose charities that will receive interest from their gift for a determined time period. Once it ends, whatever is left of the trust may go to their family or other beneficiaries. A charitable remainder trust allows charities to receive the assets once the trust term is over. Until it ends, the donor receives interest on the gift instead.
Special Needs Trust
A special needs trust can be created for a loved one with a disability. This supplements any benefits the individual with special needs may receive from government programs. With this trust, the trustor can ensure the individual receives the financial support they will need throughout their life.
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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.