Trusts

SUMMARY OF TRUSTS IN NEW YORK

Another way to manage your money is through a trust. A New York trust and estates lawyer can help an individual put a plan in place for the disposition of their assets and property, with the goal of making the process easier and less costly for the beneficiaries of the estate or trust.

HOW LIVING TRUSTS AVOID PROBATE

When a grantor creates a living trust, he funds the trust by titling assets to the trust. For example, if the grantor chooses to put his home in the trust, he must change the deed so that the trust is the named owner of the property. The same is true of bank accounts and other financial accounts, as well as titles to vehicles. Because the trust owns the property rather than the grantor, upon his death, the trust assets pass according to the terms of the trust, and probate is unnecessary. Trust funding is imperative because assets not titled to the trust may have to go through probate.

When a grantor creates a living trust, they must fund the trust by transferring ownership of their assets to the trust. This includes changing the titles and ownership of various assets such as real estate, bank accounts, financial accounts, and vehicles to the name of the trust. By transferring ownership to the trust, the assets become part of the trust property. Upon the grantor’s death, the trust assets will pass according to the terms of the trust without the need for probate. This can help streamline the asset distribution process and potentially avoid the costs and delays associated with probate. If assets are not titled to the trust, they may need to go through probate.

By properly funding the trust, the grantor can ensure that their assets pass according to their wishes and avoid probate for those assets. It’s important for individuals who create living trusts to understand the funding process and ensure that all relevant assets are properly titled to the trust. Consulting with one of our experienced attorneys can be helpful in this regard, as with our decades of experience, our attorneys can provide guidance on the proper transfer of ownership and assist with updating various documents and records to reflect the trust ownership.

COMMON TRUST TYPES

There are many types of trusts, and the one you choose will depend on your needs and the needs of the people you want to share your money and property with. Some trusts, like wills, can be revoked or changed by a competent person.

The most common trust is a revocable living trust. This type of trust give the grantor full control over their property during their lifetime. This includes the power to sell, mortgage or transfer the property. Upon the death of the grantor a successor trustee is appointed in the document. This trust then becomes unchangeable to the successor trustee. The successor trustee must adhere to the wishes of the grantor and hold or transfer the property according the terms of the trust. In essence this type of trust is a do it yourself probate which will save the usual costs, attorney’s fees and time associated with an administration or probate.

The second most commonly utilized trust is an irrevocable trust. This type of trust generally cannot be revoked or modified without either a court order or written consent from all parties involved. However, it’s important to note that the specific language and provisions of the trust document, as well as applicable state law, will determine the extent to which modifications or revocation can occur. Our attorneys at Murphy, Schisano & Rosado can provide specific guidance and ensure compliance with the state’s laws and requirements.

One key benefit of an irrevocable trust is that it may help protect assets from being counted as part of an individual’s financial resources when applying for Medicaid benefits. Medicaid has strict income and asset limits, and transferring assets to an irrevocable trust can potentially remove them from the individual’s ownership and control, making them exempt for eligibility purposes after a specified period of time has passed. However, it’s important to note that Medicaid has certain look-back periods, which vary by state, during which transfers of assets may be subject to penalties and delays in eligibility. It’s crucial to plan ahead and consult with an attorney familiar with Medicaid rules in New York to navigate any potential pitfalls or limitations.

Additionally, while an irrevocable trust can play a role in asset protection and Medicaid planning, it is essential to consider the overall estate planning goals and potential trade-offs. For example, once assets are transferred into an irrevocable trust, the individual may lose control over those assets and may no longer be able to use them for their own benefit. It’s important to carefully consider the potential benefits and limitations of an irrevocable trust and consult with professionals to determine the best approach for your specific circumstances.

SERVICES A TRUST ATTORNEY PROVIDES

For people who want to avoid the long, tedious and expensive process of probate at Murphy Schisano & Rosado we offer a wide variety of services including:

1. Meeting with the client to determine the particular trust which is right for you, there is no one size fits all
2. Creation of the proper trust and all relevant trust documents
3. Guidance in transferring asset into the trust as a trust