Rockland County Trust Lawyer

When people begin thinking about estate planning, they usually first think about creating a will and deciding which family members should receive their property when they pass away. Though a will is certainly an important part of many estate plans, it is not the only document that may be used to protect your assets, provide for your loved ones, and ensure your wishes are carried out. In fact, depending on your circumstances, creating a trust may be one of the most useful steps you can take. Continue reading and contact a knowledgeable Rockland County estate lawyer from the Law Office of Peter A. Hurwitz, PLLC, to learn more about how we can help you prepare a trust that protects your interests and your legacy.

What Is a Trust?

Simply put, a trust is a legal arrangement wherein one person transfers property to another person or institution, who will then manage that property for the benefit of one or more beneficiaries. Though the concept may initially sound complicated, trusts generally involve three primary parties. They are as follows:

• The grantor: The grantor, also sometimes referred to as the settlor or trustor, is the person who creates the trust and places assets into it.
• The trustee: The trustee is the individual or institution responsible for managing trust property and carrying out the instructions contained within the trust document.
• The beneficiary: A beneficiary is the person, or group of people, who will receive income, property, or some other benefit from the trust.

In some cases, the same person may serve in more than one role. For example, a person who creates a revocable living trust may also serve as the initial trustee and may continue using and managing the property during his or her lifetime. A successor trustee can then take over if the grantor becomes incapacitated or passes away.

The trust document will establish the rules governing how the trust operates. These rules can address who will manage the assets, when distributions should be made, which beneficiaries are entitled to receive property, and what should happen under certain circumstances. Depending on how the trust is drafted, a beneficiary may receive assets immediately, at a certain age, in periodic payments, or only for specific purposes, such as education, medical care, housing, or general support. Trusts can also hold many types of property. For example, a trust may own:

• Real estate
• Bank accounts
• Investment accounts
• Business interests
• Life insurance policies
• Valuable personal property
• Certain other financial assets

What Are the Benefits of Creating a Trust?

A properly created and funded trust can be an incredibly useful estate planning tool. Just some of the various benefits of creating a trust are as follows:

• Avoiding probate for certain assets: Property properly transferred into some trusts may pass to beneficiaries without going through the New York probate process.
• Maintaining greater privacy: Unlike a will submitted to probate, a trust generally does not become part of the public court record.
• Planning for incapacity: A successor trustee may be authorized to manage trust property if the grantor becomes unable to manage his or her own affairs.
• Controlling distributions: The grantor can establish when beneficiaries receive property and the conditions that must be met before distributions are made.
• Providing for minor children: Trust assets can be managed for children until they reach an age selected by the grantor.
• Protecting beneficiaries who need assistance: A trustee can manage money for a beneficiary who is financially inexperienced, irresponsible, vulnerable, or otherwise unable to manage a large inheritance.
• Planning for a person with special needs: Certain trusts may provide supplemental support without unnecessarily interfering with eligibility for means-tested government benefits.
• Preserving family property: A trust may be used to keep certain assets within the family and provide instructions for how they should be managed over time.
• Reducing confusion or disputes: Clear written instructions can help family members understand the grantor’s intentions and may reduce disagreements after his or her death.
• Supporting charitable goals: Certain trusts can be created to benefit charities while also serving broader estate planning or financial objectives.

What Are the Different Types of Trusts?

There are several different types of trusts available under New York law, and each is designed to accomplish a particular purpose. Some trusts can be changed during the grantor’s lifetime, while others are generally permanent once they are created. Therefore, before establishing a trust, it is important to understand what you may be giving up, what control you will retain, and how the arrangement may affect your beneficiaries. Some of the most common types of trusts are as follows:

• Revocable living trust: This type of trust can generally be amended or revoked by the grantor during his or her lifetime. It is often used to manage property, plan for incapacity, and help certain assets avoid probate.
• Irrevocable trust: An irrevocable trust generally cannot be easily changed or canceled after it is created. Depending on the circumstances, it may be used for asset protection, tax planning,
• Medicaid planning, or other long-term objectives.
• Testamentary trust: A testamentary trust is created through a will and does not take effect until the person who made the will passes away.
• Special needs trust: This trust may be established to provide financial support for a person with disabilities while attempting to preserve his or her eligibility for certain public benefits.
• Spendthrift trust: A spendthrift trust limits a beneficiary’s ability to transfer or assign an interest in trust property and may protect assets from certain creditors.
• Charitable trust: A charitable trust allows assets to be used to benefit one or more charitable organizations while potentially accomplishing additional estate planning goals.
• Life insurance trust: This type of trust is designed to own and manage a life insurance policy as part of a larger estate plan.
• Credit shelter trust: Married couples may use this trust as part of an estate tax planning strategy, depending on the size and nature of their estate.
• Qualified personal residence trust: A QPRT may be used to transfer a primary residence or vacation property under specific conditions.
• Medicaid asset protection trust: This trust may be used as part of long-term care planning, though strict funding, timing, and eligibility rules will apply.

Contact a Rockland County Trust Preparation Lawyer Today

Creating a trust is an important part of almost every estate plan. If you’d like to learn more about trusts or would like assistance creating one, please don’t hesitate to reach out to a knowledgeable Rockland County trust preparation lawyer here at the Law Office of Peter A. Hurwitz, PLLC for an initial consultation today.