Brooklyn Revocable Trust
Estate planning encompasses more than creating a will. It involves taking a close look at all of your assets as well as at your immediate and long term financial and personal goals. Part of the estate planning process involves thinking about your family relationships and the long term needs of your family members. A good estate plan will consider all of these things and may include several different strategies to ensure that personal and financial goals are met. The most common document in a estate plan is a will. However, there are other useful estate planning documents such as trusts. A revocable living trust has many features and advantages that wills do not have. With a living trust you can give gifts to beneficiaries both while you are still living and after you pass away. If you use a living trust to give away assets, you can maintain some control over how the assets are distributed. To learn more about wills, living trusts and other estate planning tools and how they can help you reach your estate planning goals, contact an experienced Brooklyn Revocable Trust Lawyer.
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A revocable living trust is a legal arrangement in which you transfer ownership of your assets to a trust. You are referred to as the trustor, grantor or settlor. A living trust is one that is created and funded during your lifetime. In contrast, a "testamentary trust" is created through your will upon your death. Your trust is revocable you reserve the right to revoke or terminate it at any time before your death. A revocable trust becomes irrevocable when the settlor dies.
When you create a trust you name someone to manage the trust assets for the benefit of the trust's beneficiaries. That person is the trustee. You can choose to name yourself as the trustee so that you retain complete control of the assets.Can a trust be used in place of a will?
A trust can function in a manner similar to a will in that it provides a vehicle for distributing your assets to your beneficiaries upon your death. An advantage of a trust over a will is that upon your death the trustee can distribute trust assets to the beneficiaries fairly quickly. In contrast with a will there is typically significant delay in assets being distributed to beneficiaries as a will must go through probate. Furthermore, a will affords you less privacy than a trust. When your executor files your will with the New York Surrogate's Court, it becomes public. Anyone can look it up and read the details. Because living trusts are not probated, with very few exceptions they remain private documents.
Although a trust can provide many of the same functions as a will, it is still important to have a will in the event that there are in assets left in your estate that you did not transfer to your trust during your lifetime. Without a will, any such assets will be subject to the laws of intestate succession. The ideal type of will to have to work with your trust is known as a “pour-over” will. With a pour-over will any assets that were not transferred into the trust during your lifetime will automatically pour over into your trust upon your death and after probate. If there are no assets in your estate that have not already been transferred to your trust, then there will be no need to admit your will to probate.Can a revocable living trust be changed?
You can change or terminate a revocable trust at any time during your lifetime. This allows you to make changes to the trust due to such changes in your family or finances. For example, you may want to change your trust if you get married, get divorced, have a child or have a grandchild. You may also want to change if you or a family member suffers a disability. However, it is not necessary for there to be some sort of family change or financial change for you to change your living trust. You can even change the terms of the trust simply because you change your mind about what property you want to include in the trust or who you want to benefit from it. However, when you pass away your revocable living trust will become irrevocable, and it cannot be changed.Are there tax benefits to having a revocable living trust?
Tax savings is not a reason to create a revocable living trust. With a revocable living trust you as the person who creates the trust retain the right to amend or terminate the trust at any time. Because you retain a significant amount of control over the assets in the trust, under federal law you are still considered the owner of the property held by the trust. Thus, you must report the trust income on your tax return and pay taxes on that income in the same manner as if the property had never been transferred to the trust. In fact, if you are the trustee of your trust, the trust is not considered a separate entity for tax purposes. An experienced estate planning professional will be able to give you insight regarding the tax consequences of creating various estate planning documents such as a will or a trust.Funding a Living Trust
Practically any property that you own can be used to fund a living trust. Funding a living trust means transferring assets that you own to the trust. This means changing ownership of the asset from your name to the name of the trust. Depending on the type of property, this can be accomplished in different ways. For example, if the property is a bank account, your bank may require you to sign new account agreements so that the account is not in your name but in the name of your trust. In addition, if the trustee is someone other than you, that person will need to sign new signature cards. Before making any change, your bank will likely want to see a copy of your trust document. If the property is a brokerage account holding stocks, bonds or mutual funds, you will need to write a letter of instruction directing the change of the name on the account to your trust. To transfer real estate to the trust, you will have to have the property redeeded to the trust. The new deed will include how the property is titled before the transfer, what the new title should be and the legal description of the property. The deed for the property will be signed by you, witnessed, notarized, and recorded in the county where the property is located. For personal property or other property that does not have documentation of ownership, the best way to transfer ownership is to draft a document that describes the property, noting that you are transferring the property to the trust.
Revocable trusts, wills and other estate planning are complex documents that must be drafted in a way that complies with New York law in order for them to be effective. If drafted improperly your estate planning goals may not be met. In addition, it is important to understand that short and long-term financial and tax consequences of transferring property to a living trust. To learn more about revocable trusts, wills and other estate planning tools, contact Stephen Bilkis & Associates, PLLC. We will help you 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 estate plan.