Property and Your
Family
When you decide to create an estate plan it is good idea to not only create a will but to consider other types of estate planning documents such as a trust. While most people are familiar with the concept of a will, a trust may be an unfamiliar concept. A trust is a legal entity that holds assets for the benefit of another person. The person who creates a trust is referred to as the trustor, settlor or grantor, while the person who manages it is called the trustee. The trustee makes decisions as to how to manage the trust assets to benefit the people you as the grantor designate as the beneficiaries. The trust agreement includes terms that inform the trustee as to how to manage the trust. While like a will a trust can be used to pass on property to others once you pass away, a trust can be designed with a great deal more flexibility than a will. A trust, however, should not be considered as a replacement for a will, but a tool that you have in addition to your will. As you think about what your estate planning needs and goals are, seek the advice of an experienced Suffolk County trust lawyer who can explain how a trust works, and why it may be important to have a trust in addition to a will.
When you create a trust you transfer assets of your choosing into the trust. The trust will then hold the assets for the benefit of the beneficiaries you choose. You can transfer practically any type of property to a trust including cash, stocks bonds, other securities, real estate, antiques, and artwork. The type of property that you choose to transfer to a trust depends on your goals. The trustee must manage the trust based on the terms of the trust agreement, for the benefit of the beneficiaries. There are many different types of trusts, each of which is designed to serve a different purpose.
Assets that have been transferred to a trust prior to the death of the grantor are not subject to probate. This is one of the advantages of a trust. Probate can be long and costly, particularly if your estate is large, complicated, and subjected to estate litigation. Thus, your beneficiaries will be able to gain access to the trust assets more quickly than if the assets are subject to probate. Furthermore, avoiding probate will likely reduce the amount of administrative fees, leaving more for your beneficiaries to enjoy.
Probate is the legal process during which the New York Surrogate’s Court validates your will and authorizes the distribution of your assets. However, there are several steps that are involved in probate that must be completed before your assets can be distributed. When you pass away your executor will alert the Surrogate’s Court and file your will along with a petition for probate. The first job of the Surrogate’s Court is to review the will to determine whether or not it is valid. The court will make sure that the will was executed in accordance with New York law. For example, according to New York Estates, Powers, and Trusts Law § 3-2.1(a)(4), the signing of the will must have been witnessed by a minimum of two people. If the judge finds anything that appears to be improper, then the judge may decline to allow the will to be probated.
If the judge determines that the will is valid, then the executor may proceed with winding up your estate. The executor will first inventory your assets and determine your estate’s value. This is important as the executor must make sure that there are enough assets to pay creditors, pay expenses related to administration, and to distribute to your beneficiaries. The executor must pay any debts of your estates prior to paying your beneficiaries. Estate debt will include fees and expenses associated with administering your estate, taxes, as well as money owed to other creditors that file a claim against the estate. If you pass away owing a significant amount of debt, it is possible that your beneficiaries will end up with very little from your estate. Once the creditors are paid, the executor will distribute the remaining assets to your beneficiaries according to the terms of your will. There is a statutory preference as to the order in which debt and expenses are to be paid. To learn more about payment of debt, contact an experienced Suffolk County trust lawyer.
In New York probate typically will take at least 7 months, but can take much longer. In extreme cases it can take multiple years. Delays may be caused by a variety of factors such as claims filed against the estate and probate litigation brought on by family members, beneficiaries and others. With a trust, however, distribution of the property that is held in trust will not be held up by probate. Your beneficiaries will receive distribution of those assets relatively quickly after you pass away based on the terms of the trust.
There are several different types of trusts. The type of trust that you choose to set up depends on your goals. For example, you can set up a trust to provide for minor children or for elderly relatives. Some establish trusts for relatives who may need guidance in handling finances. A trust can also be set up to protect your assets should you become incapacitated. Types of trusts include:
Because of the many different types of trusts that are available, it is a good idea to discuss your family’s needs with an experienced trust attorney serving Suffolk County who will be able to advise you on the options that will best help meet your estate planning goals given your personal situation. The staff at Law Offices of Stephen Bilkis & Associates will not only help you create a trust, we will also work closely with you to develop an overall estate plan that reflects your individual goals. Contact us at 800-696-9529 to schedule a free, no obligation consultation regarding your case. We represent clients in the following locations: Suffolk County, Staten Island, Nassau County, Brooklyn, Manhattan, Queens, Long Island, Bronx, and Westchester County.