Many clients are confused about the role a living trust can play in their estate planning efforts. A trust is created so that assets or property can be moved to the trustee who’s named in the living trust. Many don’t like the idea of relinquishing ownership of their assets, but the benefits are worth consideration for many of those people. It’s not that you’re losing control of your property or assets, it’s still yours. You’re just covering the legal bases in case you become incapacitated or die unexpectedly.
So why would anyone put those dynamics in place? The reasons are many.
We know that a living will covers the bases so that our survivors can avoid probate. If your assets aren’t owned by you, there’s no reason for probate. When you die, only the property that remains in your name must go through that process. It can be an extremely long process and will likely require a lot of paperwork to be filed with the local probate court. When that happens, it becomes public record, which isn’t attractive to most people – who wants their financial records to become public record? An inventory by the executor of that property must be taken and then that’s followed up with an appraisal, a settlement of debts with the proceeds of the property, a validation by the court and then the costs associated with the attorneys, executors and any court costs. Whatever remains is what’s distributed to your heirs.
Anyone who’s been through that process knows that it’s exhausting and in some cases, can take up to two years or longer. An overwhelmed court system keeps the variables firmly rooted. Perhaps the most traumatic is the absence of any privacy during an already difficult time. No doubt, a living trust is often preferred over the alternative.
Yes, You Do Need a Trust
Even if you believe your estate has little monetary value, you might be surprised that it’s required anyway. For instance, if you own property in another state or if you own artwork, an estate plan ensures it’s handed down per your requests. Each state has its own laws, so teaming with an experienced trust attorney can make all the difference, especially in New York.
Wills are also subject to probate but living trusts can be used to avoid estate taxes in some instances. They must be properly prepared and funded, which is why a qualified estate planning attorney is crucial. Not only that, but a lawyer can help ensure your named person is actually the one who oversees your assets should be come unable to do so.
Don’t assume, though, that your will won’t play a role in your estate planning efforts; in fact, it’s quite important and can help protect your assets that are traditionally covered in a trust. Consider it an extra layer of protection.
You will first want to schedule a consultation with a New York estate planning lawyer if you’ve not already done so. Once he knows the details, he can assist you as you maneuver through the legalities and then, once it’s behind you, you can rest easy knowing you’ve taken all of the necessary precautions to protect your loved ones.
The Law Offices of Saul Kobrick, P.C. is a member of the American Academy of Estate Planning Attorneys.