In New York state, individuals can place their estate into a trust to distribute to beneficiaries and thereby avoid lengthy and costly probate proceedings in a Surrogate’s Court. While a traditional last will and testament may be better for some individuals, for many it may be best to create some form of a trust, particularly a living trust, to ensure loved ones receive their portions as quickly as possible and with as little tax liability.
It is also worth noting that even after creating living or inter vivos trusts, you will still need a last will and testament to ensure any of your final wishes are carried out and assets left out of the trust are dealt with as you see fit. Without a will to cover newly acquired assets or those not named in the trust, the remainder of your estate could considered in intestacy and pass on to your heirs in succession under New York law.
While creating a trust is a fairly straightforward affair, it may still be necessary to consult with financial advisors or an estate planning attorney to ensure proper transfer of your assets. The first step will be to create the trust and there are many resources from the New York State Bar and Surrogate’s Court system online you can go to for forms and information how to file.
Next, you will need to sign the forms in front of a notary public and have documents notarized. This is an important step because if there are any legal challenges to your trust, it will be vital to ensuring your trust remains intact. Finally, you will want to transfer the actual property or assets over to your trust.
One of the main advantages of setting up a living trust, apart from avoiding probate, is maintaining control over your own assets while still alive. Furthermore, should you choose to create a revocable living trust, you can modify or suspend the trust at any time should circumstances necessitate a change.
In some situations, it may be necessary to create an irrevocable trust which you cannot modify. Scenarios where an irrevocable trust may be necessary include spending down to qualify for Medicaid. However, assets in irrevocable trusts may still count against Medicaid asset spending if the grantor has any kind of discretion over spending or other type of control.
Whether you decide to create only a last will and testament or set up a living trust depends entirely on your own personal situation. In some cases where individuals have modest estates, it may not be necessary to create either but it is generally a good idea to at least create a will and consider the benefits of other estate planning aspects as well.