Trust Lawyer NYC – New York Trust (Revocable and Irrevocable) Attorney
New York City Lawyers Concentrating in Trusts
With the string of celebrity deaths in the last few years, more people are hearing about trusts and getting to appreciate the importance of estate planning. When we first speak to potential clients over the phone, the theme is repetitive: everyone wants a trust or thinks that they need one, and yet not many know its purpose and functionality. You may have read an article in Parents magazine or a financial publication advising that everyone should partake in estate planning, no matter the size of the estate. This almost always holds true. There are rare circumstances when a married couple, for example, may have no reason to buy into estate planning, where all assets are jointly held. Nevertheless, although a will is recommended in most situations, a trust is not.
Estate law is a complicated area of law that can be navigated and thoroughly explained by an experienced trust lawyer. Consider this post as a starting point to understanding what a trust is. If you need a consultation with a trust lawyer in NYC, feel free to contact our law firm at (646) 233-0826.
What is a Trust?
Consider a trust a separate entity, such as an LLC or a corporation. Depending on the type of trust, a third party is appointed to hold and oversee the assets of the trust for the intended beneficiaries. This third party is called a trustee. In a revocable trust, the creator is usually named the trustee. Some trusts have restrictions on who can be named as trustee. Trusts come in different shapes and forms and can be tailored to fit your needs. Trusts have the ability to shield assets from creditors, save hundreds of thousands of dollars in estate taxes, qualify the elderly for health care, and primarily, provide for an easy estate distribution.
Here are the top six reasons why a Trust can be extremely effective and useful:
- Trusts are harder to contest in Surrogate’s Court as opposed to a will.
- The probate process can be entirely avoided if all of the decedent’s assets are placed into the trust.
- You can provide for a clear, detailed distribution for certain beneficiaries.
- There is no requirement that the document be filed with the court for all to see.
- Hard earned assets can be protected from litigious claimants.
- You pay more for a trust now, but save money later on probate fees and estate taxes.
One of the most impressive features of a trust is that the creator’s estate can avoid probate altogether at the time of death. You can learn more about the NYC Probate Process and Administration here. To quickly summarize the probate process, if a loved one leaves behind a last will and testament, that will needs to be probated. Surrogate’s Court will oversee the probate process.
The Probate Process with its Delays and Expenses
Probating a will can become a daunting proposition for some. For starters, probate procedure requires that the decedent’s heirs be provided with a copy of the subject will and given the opportunity to contest its validity. This means that if anyone is disinherited, or is receiving less under the will than they would have if there was no will, they can delay the administration by bringing a will contest on legitimate or not so legitimate grounds. When a will is challenged, estate distribution can become very costly and be prolonged for many years.
Trusts take the probate process out of the equation. Of course, a trust can also be challenged in court, but the truth of the matter is, that trusts are complex instruments and bringing a contest is no easy task. Most probate lawyers know how to contest a will but are not so versed in trusts. Finding an experienced trust litigation lawyer is a challenge on its own and can be very expensive for the litigant, which is a deterrent for most.
Assuming the instrument is property drafted, you can’t beat a trust – administration is quick, cost-efficient and court supervision or intervention is not necessary. For many families, it can impact their quality of life and bottom line.
Trusts are Private Information
Trusts are not subject to filing with the Surrogate’s Court. Once filed, a will is a public record for everyone to see. This means that if a disinherited party or a creditor wants to know about the value of your estate and the contents of the will, to determine whether to bring a lawsuit or to create trouble, they can easily access the entire file in the courthouse. They don’t need to sign in, provide their ID or pay any fees, its as easy as typing in the decedent’s name onto the public computer in the Record Room of the county Surrogate’s Court.
A will makes it easy for creditors. Upon review of the public record, if the probate documents mention assets, a creditor can make a claim and collect from the estate. If nothing is filed, creditor and disinherited parties are kept in the dark and most times never get to know the value and the identity of the beneficiaries. If you are unhappy with this line of exposure, there is a way around it – invest in a trust!
Trusts Give the Grantor Control
A trust permits flexible distributions with remote oversight. The creator is at liberty to provide for a straightforward distribution or outline a set of internal controls. For example, John’s trust says that his daughter is to inherit his estate upon his death. On the other hand, Anna’s trust provides that her daughter is to inherit her estate at age increments (ie 25% at age 21, 25% at age 25, etc) and only upon attaining a college degree. A trust gives the creator more freedom to control beneficiary distributions during his life and from the grave.With a last will and testament, once you pass away, your assets are transferred to a beneficiary in one single swoop. With a trust, you can direct the trustee to transfer money to your beneficiary on a monthly or yearly basis, or provide distributions on certain conditions being met.
Full Accountability of the Trustee
Asset mismanagement by an executor or a trustee remains one of the biggest concerns of someone preparing their estate plan. Today, most trusts mandate for an annual accounting by trustee to the beneficiaries. An accounting does not have to be expensive requiring the services of a CPA. Instead, it can take form of monthly bank statements and an Excel ledger. In addition, you can mandate an external audit be conducted by an independent third party every few years to ensure all assets in the trust are accounted for and are being distributed properly.
Revocable vs. Irrevocable Trusts
Revocable Trust
Perhaps the most significant reason for the creation of a revocable trust is the avoidance of probate. More reasons to create a revocable trust include smooth estate administration, privacy, control over future distributions, and tougher trust contest laws, to name a new. Also known as a living trust, the creator is able to maintain control over his assets. Even tough the best practice is to retitle assets into the name of the trust, there is no relinquishment of ownership. The creator is typically named as the trustee and continues to control his/her property as they see fit. However, since the creator is still the owner of the assets, there is no avoidance of creditor or judgment liens.
Irrevocable Trust
Generally speaking, an irrevocable trust is just that – irrevocable. It cannot be amended or terminated. Although irrevocable trusts provide the most protection, they are not suited for most. This type of trust is great for the purpose of avoiding creditors and decreasing your net worth (this is advantageous for Medicaid qualification purposes).
With an irrevocable trust, you retitle your assets to the name of the trust and relinquish your ownership to the property. The main drawback from some is that you or a spouse cannot serve as trustees. Prior to trust preparation and execution, you need to be absolutely certain that an irrevocable trust is right for you. There are strategies available to a trust lawyer to terminate or amend an irrevocable trust, but it can be very challenging and sometimes impossible in certain circumstances.
Consult a Trust Lawyer in New York City
As New York City Trust and Probate lawyers, at Mishiyeva Law, PLLC we assist individuals and families in Brooklyn, Manhattan, Queens, Bronx, Long Island and Staten Island with various matters pertaining to estate law. Contact us for a consultation at (646) 233-0826.
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