When you create a trust, you ensure the beneficiaries of your estate will receive the maximum benefits of their inheritance. Trusts are one of the primary ways people retain control over their estate’s future. If you are interested in preserving your wishes in a testamentary document, here are some of the questions you may have:
What is a trust?
Generally, a trust is either considered “revocable” or “irrevocable.” Rather simply, an irrevocable trust is one that cannot be changed without the explicit consent of the beneficiary, while a revocable trust can be changed or modified by the testator, as long as he or she is mentally capable of doing so.
What are the benefits of a trust?
Trusts have several potential benefits, though most notably are their tax implications. Irrevocable trusts have several tax benefits that will benefit those in your will. Trusts can also be used to help pass out assets outside of probate, distribute your assets more efficiently, and save your loved ones legal costs that may arise.
What are some different types of trusts?
There are several different trusts available in the state of New York, each designed for a different purpose. Some of the most common types of trusts are as follows:
- Inter Vivos Trust: This refers to the transfer, or gift made during one’s lifetime.
- Life insurance trusts: This is an irrevocable trust which is both the owner and beneficiary of one or more life insurance policies.
- Testamentary trusts: These trusts are effective upon the death of the testator.
- Qualified personal residence trusts: An irrevocable trust designed to remove the value of your primary residence or second home from your taxable estate at a reduced rate for federal gift and estate tax purposes.
- Asset protection trusts: A form of trust that allows funds to be held on a discretionary basis.
- Supplemental needs trusts: These trusts allow a disabled beneficiary to use property that is held in the trust for his or her benefit while also receiving needs-based government assistance.
- Charitable remainder trusts: A tax-exempt revocable trust made to reduce the taxable income of individuals by distributing income to the beneficiaries for a period of time and donating the remainder of the trust to the designated charity.
- Charitable lead trusts: These are irrevocable trusts made to provide financial support to one or more charities for a period of time, and then distribute the remaining assets to family members or other beneficiaries.
Contact our experienced New York firm
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.