Three reasons everyone in New York should have a living trust
Living wills offer numerous benefits and may help people build secure financial futures for themselves and their families.
When it comes to ensuring a secure financial future for themselves and their families, many New Yorkers recognize the importance of estate planning. While they may draft a will to handle the disbursement of their assets and plan for the possibility of incapacitating injury or illness, people may not consider other options, such as setting up a living trust. Often thought of only as a means for bypassing the probate process, including this type of document in their estate plans may offer numerous other benefits.
Living trusts can be set up as either revocable or irrevocable. With a revocable trust, people retain control of the assets they have placed in the trust, and they can alter or revoke the trust terms at any time. Once assets are placed in an irrevocable trust, on the other hand, people no longer have control of them. Further, they cannot change the terms of the trust without the consent of the beneficiaries.
Probate is a public process, which means that anyone can go through people’s estate files after they are deceased. For any number of reasons, people may not want this type of personal and financial information made available. Since revocable living trusts are not filed with the probate court, they may be kept private. No one is able to view them unless permitted by the trustee or grantor. This may help them protect their heirs from people who might seek to prey on them using estate information, as well as avoid some types of disputes between family members.
Due to age and maturity, physical or mental incapacity, or for any other number of reasons, some intended beneficiaries may not be able to handle receiving an inheritance. Living trusts allow people to pass property on to their loved ones, while also protecting it for them. They may specify an age when the beneficiary may be entitled to have the inheritance and stipulate how the trustee may use the money for the beneficiary’s benefit until that time.
Prepare for incapacitation
Albeit unpleasant, think about the possibility of incapacitation is an important step in the estate planning process. With some options, people may not be able to ensure the disbursement of their assets that they intend. Other options may require court oversight or there may be interruptions in the management of people’s property.
Living trusts allow people to protect their assets, as well as themselves. Wills do not go into effect, and executors do not take over, until people’s deaths. With a revocable living trust, however, their trustees may start managing the trust’s property when they become incapacitated or if they resign. This may help ensure their affairs are attended to, even if a time comes when they cannot manage them themselves.
Seeking legal assistance
Although it may seem morbid to think about end-of-life and incapacitation decisions, estate planning is an essential step for people in New York and elsewhere. Working with a legal representative may help people understand the options and create a plan that works for their situation and needs.