More New York residents than ever use living trusts to protect their assets as part of their estate plans, and for good reason. Living trusts, also known as revocable trusts or grantor trusts, serve a variety of purposes. A revocable living trust will allow you to avoid the probate process and can provide you and your loved ones with a lifetime of benefits. Instead of having to go through the time-consuming and often costly probate process, your loved ones will be able to access the assets in the living trust immediately after your death.
Consult with a Syracuse Living Trust Lawyer Today
A carefully crafted living trust can give you significant financial advantages and protect you from unnecessary taxes. It can also help you transfer your assets more effectively and efficiently. If you would like to discuss creating a trust with an experienced estate planning lawyer, contact CDH Law PLLC today to schedule your initial consultation. We have helped many Syracuse-area clients successfully create a revocable living trust to protect themselves and their loved ones.
What Is a Revocable Living Trust?
A revocable living trust is an estate planning instrument. When you create a living trust, you will transfer assets into the trust. You can appoint yourself as a trustee and control your trust assets during your lifetime. When you pass away, your beneficiaries will have access to the assets in the trust.
Avoiding the Probate Process
Avoiding the probate process is one of the key benefits of creating a living trust. When a person dies with a last will and testament in place, his loved ones will need to submit the will to the probate court. The probate court will appoint an estate executor who will administer the probate process. The probate process involves paying off debts, identifying the beneficiaries, and distributing the assets in the estate. The probate process can cost thousands of dollars in court costs, attorneys fees, and statutory fees.
The probate process can also involve legal conflicts. Suppose one relative thinks that the will is fraudulent. That relative may be able to bring a will contest before the probate court, disputing the legal validity of the will and dragging out the probate process. When you create a living trust, your estate administration can occur outside of the probate process. None of your relatives will need to submit your trust to the probate court. Instead, you can arrange your trust so that your loved ones automatically receive their inheritance after you pass away.
Protecting Your Assets During Incapacity
Thinking about the possibility of becoming incapacitated is challenging, but it’s a necessary step to protect yourself and your loved ones. A living trust can protect your assets and ensure that they are well-managed should you become incapacitated. This allows you the opportunity to set out your wishes for how you should be cared for if you become incapacitated.
You can also select someone to act as a trustee and manage the assets in the trust if you become incapacitated. Doing so allows you to bypass the need for a court to get involved in appointing a guardian over you. If you are married, you can make yourself and your spouse trustees. If you become incapacitated or pass away, your spouse will automatically have the right to manage the assets in the trust and access them when necessary.
Creating a Revocable Trust
You have a significant amount of flexibility when it comes to the terms of your trust agreement. In most basic agreements, the grantor, or the trust creator, will provide the funds for the trust. This process involves the grantor transferring ownership of his or her assets into the trust. You will also need to appoint one or more trustees. You can appoint yourself as a trustee, but we recommend appointing another trustee or a backup trustee should you become incapacitated.
You will continue to have control and access the assets in the trust until your death. When you pass away, the trustee you’ve selected to be your successor will begin administering the trust. You can choose to distribute the funds within the trust to your beneficiaries when you pass away. As the trust’s grantor, you can set forth the conditions on who will receive the assets in your trust.
The Difference Between Revocable and Irrevocable Trusts
Revocable living trusts are popular because they offer people many cost-saving benefits. However, they typically don’t provide relief from a state tax in New York. If you have a high net worth and a substantial estate, you may be subject to a 40% estate tax. In this situation, creating an irrevocable trust could be more beneficial to you from a tax savings perspective. Additionally, any income generated by the irrevocable living trust will not be considered taxable income.
However, you will not be able to access and control the funds in your irrevocable living trust. You will not be able to revoke an irrevocable living trust or withdraw the funds for your use. As a result, many people choose to create a revocable living trust to continue managing their assets during their lifetime. One of our experienced estate planning lawyers can help you determine whether the benefits outweigh the disadvantages of creating an irrevocable living trust.
Contact a Syracuse Living Trust Lawyer Today
Living trusts are an important component of a comprehensive estate plan. At CDH Law PLLC, our living trust lawyers have many years of experience advising clients on the benefits of creating a living trust. We work closely with our clients to create estate plans tailored to their goals and unique situations. If you have questions about creating a living trust, we can help. Contact us today to schedule an initial consultation.