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Suffolk County Revocable Trust

A will is the document that is most often associated with estate planning. It is, however, not the only document. Like wills, trusts are also commonly used to plan for the orderly transfer of wealth from one person to another. A trust is an arrangement that authorizes a trustee, who can be the person who creates the trust, to hold title to and manage the assets in the trust. There are many different types of trusts that serve different purposes. One type of trust is a revocable trust. Revocable trusts, commonly called “living trusts,” are an effective estate-planning tool for avoiding the costs and challenges of probate, preserving privacy, and transferring property to others. Because of the many different types of trusts and the legal complexities involved with creating them, if you are contemplating establishing a trust, seek the advice of an experienced Suffolk County revocable trust lawyer.

Revocable living trust

A revocable trust, or a living trust, is a trust that is created and funded during the lifetime of the grantor. There is another type of trust called a "testamentary trust" which would be created through a will upon the death of the grantor/testator. Unlike assets in a testamentary trust, the assets transferred to a revocable living trust during the grantor’s lifetime are not subject to probate.

When establishing your revocable living trust, you can name yourself as the trustee. This allows your to retain control over the assets in the trust. Because the trust is revocable, you can change or terminate it at any time during your lifetime as long as you have the mental capacity to do so. This allows you to make changes to the trust due a marriage, divorce, birth, death, disability, or for any other reason. You can even change 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.

Trust vs. will

If you create and fund a revocable trust, then a trust can function like a will in that it provides a vehicle for distributing your assets to your beneficiaries upon your death. An advantage of a trust is that upon your death the trustee will distribute the trust assets directly to the beneficiaries designated in the trust document according to the terms of the trust. In contrast, assets in a will must go through the sometimes extended and expensive probate process before they can be transferred to the beneficiaries. 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 about the assets in your estate and the terms of your will. Because living trusts are not probated, unless a trust is part of litigation, its terms will remain private documents.

Although a living trust in certain ways can function as a will, it is still important to have a will. A will is important to have in case there are 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. There are multiple types of wills, including a pour-over will design so that any assists that remain in your probate estate immediately “pour-over” into the trust following probate. An experienced Suffolk County revocable trust lawyer will be able to explain the different types of wills and the best option for your specific situation.

Tax benefits to having a revocable living trust

Tax savings is not a reason to created 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 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. As an experienced Suffolk County revocable trust lawyer will explain, there are other strategies that may be available to you that would offer significant tax benefits.

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.

Bank accounts. To transfer ownership of a checking or savings account to your living trust 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.

Brokerage accounts. To transfer ownership of stocks, bonds, or mutual funds held in a brokerage account, you will need to write a letter of instruction directing the change of the name on the account to your trust.

Real estate. 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.

When transferring property to a trust there may be additional complex issues related to the mortgage, if any, property taxes, transfer taxes, and issues related to rental property.

Loans owed to you. If you have loaned anyone money, you can assign these to your living trust, meaning that payments on the loans will not be made to you, but to the trust. The assignment is sign by you only, notarized and attached to the original loan document.

Safe deposit box. To changed ownership of a safe deposit box to your trust you will need to change the authorization card to your trust and the trustee will need to sign the card.

Personal property. For personal property or other property that does not have an documentation of ownership, the best way to transfer ownership is draft a document that describes the property, noting that you are transferring the property to the trust.

Before you transfer any asset to your trust, seek the adv ice of an experienced revocable trust attorney in Suffolk County to ensure that the transfer is completed properly.

Contact the Law Offices of Stephen Bilkis & Associates

Revocable trusts, wills and other estate documents 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 and your estate may suffer financially. To learn more about revocable trusts, wills and other estate planning strategies, contact an experienced revocable trust attorney serving Suffolk County at the Law Offices of Stephen Bilkis & Associates. We treat every client with concern, respect and dignity. 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: Suffolk County, Bronx, Staten Island, Nassau County, Brooklyn, Manhattan, Queens, Long Island, and Westchester County.

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