Most of us think of trusts as being only for the wealthy. New Yorkers may know terms like "trust fund baby" or "charitable trust," but may rarely think about what a trust really means (aside from whether you can trust the person next to you on the subway).
However, a living trust can be very helpful to everyday folks. It can help organize your assets and help your heirs avoid the potentially costly process of probate.
Here are some issues to consider when you're deciding how best to deal with your estate:
Probate is a court-supervised process in which your assets are gathered up and then distributed. This distribution is done either by the instructions in your will, or if there is no will, by what is called "intestate succession." Intestate succession is the transfer of property to your relatives in an order determined by law.
A trust allows you to transfer your property to the people you want without having to go through the court process. This is helpful because the court process and attorney's fees can take a good chunk out of an estate.
Size of Estate
Another factor to consider is the size of your estate. Yes, I mentioned that trusts aren't just for rich people, but having more money does make a trust a better option for distributing your assets after your death. This is because the more assets you have, the higher the probate fees.
Also, if you have a larger estate, you can use more complex living trusts to help avoid estate taxes for your beneficiaries.
Wills that go through the probate system become part of the public record. The same is true if there was no will. However, if you have a trust that does not go through the court, your assets will not become public. This helps to avoid situations like what is happening with the estate of Sherman Hemsley, the late actor known for his role in "The Jeffersons."
If you have more questions about living trusts, a New York estate planning attorney would be happy to answer them. Many of these attorneys generally offer a free hour of consultation to help determine what is best for you and your family.
- How to Avoid Probate (FindLaw)
- Requirements of a New York Lifetime Trust (FindLaw's New York Estate Planning News)
- You Don't Clean Your Ears With a Q-Tip Trust in New York (FindLaw's New York Estate Planning News)