Staten Island Living Trusts
The last will and testament is by far the estate planning document that most people are familiar with and understand. Simply put, a will is a legal document that people use to set forth their wishes as to how their property should be distributed once they pass away. However, in addition to having a will, more and more people are using the centuries old estate document called a trust as a part of their overall estate plan. A trust is a legal arrangement in which one person, called the trustee, holds the assets of the person who created the trust, known as the trustor, for the benefit of a third person, called the beneficiary. A trust can be either testamentary or living. A testamentary trust is created through your will. A living trust, on the other hand, is one that you create while you are living. Depending on your financial situation, your family situation and your goals, it may be a good idea to have not just a will, but also a trust. If you are contemplating the best way to make sure that your estate is distributed in a manner that meets all of your goals, it is important to contact an experienced Staten Island living trust lawyer who will be able to explain to you the benefits of a trust and whether it will help you attain your estate planning goals.Using a trust to protect the assets of certain beneficiaries
One reason to create a trust is to protect and preserve the assets that you want to give to a beneficiary who is unable to manage those assets. For example, if you have minor children, then you can transfer assets to a trust with your children as beneficiaries. When your children become adults, then the assets in the trust can be distributed to them.
However, minors are not the only people who do not handle money well. There are many adults who are irresponsible with money. If you would like to give an adult relative money who has a track record of being financially irresponsible, then instead of handing that person a check for the entire balance, you can put the money in a trust for the benefit of that person. This type of trust is often set up as a spendthrift trust. With a spendthrift trust, the beneficiary cannot access the trust principal. Typically, the trustee will give the beneficiary a monthly allowance. Because of the restrictions on the beneficiary's access to the trust's principal, the beneficiary cannot use it as collateral or promise it to anyone. Because the beneficiary cannot access trust funds, neither can his or her creditors.
Another reason to set up a trust is to protect the assets of a child, sibling or other relative who has special needs. With a special needs trust you can ensure that a beneficiary with special needs has funds to pay for certain expenses related to his or her care. A significant benefit of the special needs trust is that it allows you to provide resources to the beneficiary without jeopardizing that beneficiary's eligibility for need-based government benefits such as Medicaid. Special needs trusts are often set up to benefit loved ones with autism, Down Syndrome, and cerebral palsy.
Care must be taken when setting up a special needs trust, and the trustee must understand the limitations on how trust funds can be used. Eligible expenses may include medical care, rehabilitation, education and training, special equipment, companion care, and recreation. As an experienced Staten Island living trust lawyer will explain, failure to properly set up a special needs trust or properly manage its assets may result in harsh financial consequences for the beneficiary.Using a living trust to avoid probate
Unlike a will, assets that you transfer to a living trust during your lifetime are not subject to probate. Probate is the process during which a will is validated by the New York Surrogate's Court and the assets in your estate are distributed to the beneficiaries you name in your will. While this may seem like a simple process, probate can be quite complicated and is usually lengthy. Typically it takes least 9 months and sometimes well over a year. If you transferred your assets to a living trust, then upon your death those assets can be distributed to your beneficiaries relatively quickly.
Keep in mind that unlike a living trust, a testamentary trust does not avoid probate. A testamentary trust will be funded with your assets only after those assets go through probate.Using a trust to protect your privacy
When a will is submitted to Surrogate's Court to be probated, it become a matter of public record. This means that anyone can go into the clerk's office and review the estate file. In other words, anyone will be able to read the will, find out who your beneficiaries are and what you left them, look at the claims of creditors and the list of assets, and even find the phone numbers and addresses of your beneficiaries. If you have a living trust you can keep your estate details private. Because living trusts are not subject to probate, they are not filed with the Surrogate's Court and are not made public.Funding a living trust
As an experienced an experienced living trust attorney serving Staten Island will explain, a living trust will not work as an effective estate tool if it is not funded. Funding a living trust means transferring your property to it. Once you do so the property will no longer legally be owned by you, but by the trust. If you name yourself as the trustee of the living trust, despite the fact that you transferred your property to it, you will still maintain a great deal of control over the property. Keep in mind, however, there may be gift tax consequences to transferring property to a living trust for the benefit of another person.
A trust can be funded with almost any type of property. Trust property typically includes cash, stocks, and real estate, but can also include a business, gold or other precious metals, fine art, jewelry, antiques, collectibles and other personal property.
Funding a trust with cash is relatively simple, requiring you to simply open a bank account with the trust as the owner. Each time you deposit money into that bank account owned by the trust, you will be adding to the trust's principal. Similarly to fund a trust with stocks or bonds, you would have to follow the same procedure: open a brokerage account in the name of the trust and transfer investments to it. To fund a trust with a house or other real estate, you would have to re-titled the property from your name to the name of the trust. A new deed will have to be executed and filed with the appropriate government agency. If you still have a mortgage on the property, the transfer will become more complicated.
To fund your trust with personal property such as jewelry, works of art, antiques, collectibles and clothing you would need to complete a document detailing the nature of the property and stating that you are transferring ownership to the trust. Particularly in the case of property such as a vehicle, before you transfer it to a trust, an expert should be consulted to advise you of the financial consequences of such a transfer as well as any state and local requirements of affecting such a transfer.Contact the Law Offices of Stephen Bilkis & Associates
A living trust is an estate planning tool that offers a great deal of flexibility. You can use it for a variety of goals such as leaving assets to loved ones, providing for a disabled relative, protecting your assets. However, a trust is a complicated document and in order to receive all of the benefits of a living trust and to minimize tax consequences, it must be set up properly. Different types of trusts have different requirements that only an experienced New York City Living Trust Lawyer will understand. To learn more about how a living trust would fit into your estate plan contact an experienced living trust attorney serving Staten Island at the Law Offices of Stephen Bilkis & Associates. We will help you develop an overall estate plan that reflects your individual goals. Contact us at 1-800-NY-NY-LAW (1-800-696-9529) to schedule a free, no obligation consultation regarding your case. We represent clients in the following locations: Queens, Bronx, Nassau County, Suffolk County, Brooklyn, Long Island, Manhattan, Staten Island, and Westchester County.