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Suffolk County Revocable Trust

In planning for your future there are several estate planning documents that can help you achieve your goals. The most common document is a last will and testament. A will is primarily used to leave property to others when you pass away. However, there are other estate planning documents to consider in addition to a will. A revocable living trust, for example, 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. In giving away assets through a trust, you can also 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 Suffolk County Revocable Trust Lawyer.

What is a Revocable Living Trust?

A revocable living trust is an legal arrangement in which you as the trust settlor transfer ownership of your assets to a trust. The reason a trust is called a living trust is because you create it during lifetime. There is another type of trust called a "testamentary trust" which would be created upon your death. You will name someone to manage the trust assets, known as the trustee, for the benefit of another person, known as the beneficiary. You can choose to name yourself as the trustee so that you retain complete control of the assets. A trust is revocable if the settlor reserves the right to revoke or terminate at any time before his or her death. A revocable trust becomes irrevocable when the settlor dies.

Can a trust be used in place of a will?

If you create the trust during your lifetime and transfer your assets to it during your life time, 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. In contrast, assets in a will must go through the sometimes extended probate process before they can be transferred to your 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. Because living trusts are not probated, with very few exceptions they remain private documents.

Although a living trust can function as a will, it is still important to have a will. A will is important to have in case 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 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.

Are there 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.

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 street 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.

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. 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.

Client Reviews
Mr. Bilkis handled both my father and mother's estate issues through very difficult times he was compassionate kind and understanding. In fact the whole firm showed great empathy. Despite the emotional hard time we were having that quickly and efficiently handle all the matters that were necessary to get us the result we desired. Can't recommend them enough. B.B.