A Brooklyn Trust Attorney Discusses Trusts and Why They’re Important for Your Estate Plan
When you’re ready to create an estate plan, you may think that a last will and testament is the only document you need. Many people don’t realize they might also need a trust. This strategy allows you to do more to safeguard your estate and help secure your legacy for your heirs and beneficiaries.
The skilled Brooklyn trust lawyers at Landskind & Ricaforte Law have helped thousands of New Yorkers create trusts as a way to protect their assets and help ensure their loved ones can bypass the time-consuming process of probate. Here, we discuss the various types of New York trusts we handle and why these trusts can be so beneficial to your estate plan.
Understanding New York Trusts
When you create a will, you offer a protective measure for your assets and family after you die. However, when you include a trust in your estate plan, you can also provide other advantages, including tax benefits and keeping your estate out of probate. Your successor trustee, who manages the trust, executes your wishes as you’ve documented them and enables heirs and beneficiaries to access their inheritances more quickly.
In New York, you can establish different types of trusts depending on your specific estate planning needs. The most common directive, known as a living trust or revocable trust, is a legal document created to help protect your assets. It’s an estate planning tool that allows you to transfer many types of assets into the possession of the trust. In a trust, you state what should be done with your assets after you die and who receives them.
When you write a trust, you’re known as the “grantor” or “settlor,” and you can put just about anything you own into the trust. This includes:
- Money
- Jewelry
- Art collections
- Vehicles, including RVs, motorcycles, and boats
- Life insurance policies
- Stocks and bonds
- Digital assets
- Written works
Advantages of a living trust include:
- It allows you to transfer assets in and out of the trust’s control whenever you feel it’s important or necessary.
- It can help minimize your taxable income and eliminate intergenerational wealth taxes for your beneficiaries.
- It allows you to retain asset control while you’re still alive and simultaneously plan for their distribution after you die.
- You can change, revise, or revoke the terms of the trust at any time to account for unexpected circumstances.
- It allows you to set conditions for dispersing an inheritance to a specific beneficiary—for example, stipulating that a child receive funds only for college or the purchase of a home.
Our New York Trust Lawyers Can Help You Establish a Trust
When you set up a trust, it’s important to understand the benefits and risks. That’s why you should obtain legal counsel when beginning the estate planning process or adding a trust to an existing plan. Our experienced Brooklyn trust attorneys explain how a trust may benefit your situation, and help you choose a directive that best fits your specific financial needs. Here are the five most common trusts we recommend to our clients.
Revocable Trust
Also called a living trust, a revocable trust helps protect the grantor’s estate from probate—which is a primary benefit of this type of trust. As we mentioned above, this document allows you to have full control of your assets, amending or eliminating certain aspects as you wish.
Irrevocable Trust
If you establish an irrevocable trust, you can’t change anything in the document or revoke the trust after you create it. As a grantor, you may want this kind of trust to limit estate taxes or to protect assets from creditors—however, your rights to the trust are severely limited once it’s been established.
Special Needs Trust (SNT)
If you have a family member with special needs, this type of trust can help secure their future. An SNT is set up to provide financial support for people with a disability without jeopardizing their government benefits, such as Medicaid or Supplemental Security Income. The trust lawyers at Landskind & Ricaforte understand what’s needed to properly set up an SNT to protect your loved one.
Charitable Trusts
There are two types of charitable trusts: a charitable lead trust and a charitable remainder trust. Both offer possible tax benefits, and both have potential disadvantages that you should consider before including them in your estate plan.
- Charitable remainder trusts. This is a way for you to give assets to a charity and receive income while you’re still alive. The trust pays you income generated from the assets that you’ve transferred into it. You can also identify a charity to receive the “remainder interest”. After you die, any remaining assets are given to the charity. If you want your charity to obtain an immediate financial benefit, you wouldn’t create a charitable remainder trust.
- Charitable lead trusts. With this directive, you support a charity for a length of time of your choosing, and the remaining money goes to your family or other beneficiaries when you die. This can be a suitable trust if you don’t need the income generated by the trust assets while you’re alive.
Both options offer tax benefits while the grantor is alive and for beneficiaries after you die. Any charity you choose must qualify with the IRS to receive charitable deductions.
Irrevocable Life Insurance Trust (ILIT)
An ILIT allows the grantor to take life insurance out of their estate. Because this is an irrevocable trust, you can’t borrow against the policy or change your named beneficiaries. However, after you die, the life insurance policy proceeds are distributed to your beneficiaries as tax-free income.
The Brooklyn trust attorneys at Landskind & Ricaforte handle other options, too, such as:
- Dynasty trusts that allow you to transfer funds tax-free to your grandchildren or family members at least two generations younger than you
- Qualified personal residence trusts that remove the value of a property from your estate
- Qualified terminable interest property trust that may benefit you if you’ve remarried, have children from a prior marriage, or have stepchildren.
When a Family Member Contests a New York Trust
If you believe a trust doesn’t accurately reflect the intentions of your deceased loved one, or you believe your loved one signed their trust document under duress or coercion, was a victim of fraud, or was not mentally sound at the time of the signing, you have a right to contest the trust. If you doubt the circumstances under which the trust was created, your rights under New York law protect you. But it’s important to reach out to our knowledgeable trust lawyers to help prove your suspicions.
How Our New York Trust Attorneys Can Help You Administer a Loved One’s Trust
If you were named trustee or your loved one’s trust, it means that the state recognizes you as the person with “fiduciary responsibility to administer the trust as specified by the grantor or trustor.” It’s only natural that, when taking on this responsibility, you may feel overwhelmed by the duties required of you and the accountability of fulfilling all the necessary tasks. 
That’s why it’s important to reach out to our Brooklyn trust attorneys who can help ensure that you complete these tasks according to New York law. It’s possible that attempting to administer a trust without guidance and an understanding of the requirements and law could create legal problems for you and the estate. Our trust attorneys can help you:
- Keep complete and detailed trust records
- Gather, identify, and inventory the deceased’s assets
- Notify all beneficiaries and heirs
- Pay creditors and all debts
- File the estate tax and any other necessary taxes
Because the trust administration process can be complex, it’s in your best interests to obtain a trust lawyer to guide you through the process. When you have a professional skilled in New York trust law, you have peace of mind that the trust will be distributed legally, properly, and in a reasonable time.
Whether you need to establish or administer a trust, our team of New York trust lawyers is ready to help with your unique situation. We’ll provide the guidance and legal support you need.