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Revocable Living Trust

AARP agrees that utilizing a revocable living trust is the new thing! Revocable living trusts provide savings opportunities, save probate expenses, and provide other advantages over a will.

What is a revocable living trust?

It is a relationship established between three parties:

    1. The creator of the trust;
    2. The trustee who manages the property within the trust and distributes proceeds to beneficiaries; and
    3. The beneficiaries who receive the property according to the terms of the trust.

A revocable living trust allows assets within the trust as well as income generated by those assets to be managed and distributed by the trustee. The trust income and property are then distributed in accordance with the terms and conditions of the trust. This type of trust is referred to as a living trust because it is established during the life of the creator.

How does one benefit from a revocable living trust?

A revocable living trust provides numerous benefits to the creator. If the creator becomes incapacitated, the trustee is typically authorized to manage all of the assets within the trust as well as any obligations in accordance with the terms of the trust without court intervention. A revocable living trust will also provide financial assistance to family members if the creator becomes incapacitated. Upon the death of the creator, the trust transfers assets outside of the estate and outside of probating a Will. A living revocable trust can also be structured to minimize federal or state tax consequences. A revocable living trust also allows the creator to act as trustee, either with their spouse or without their spouse, or even revoke or modify the trust prior to death.

How does a revocable living trust compare to a will?

Both a revocable living trust and a will are tools that provide a method of passing property and other assets to family members and loved ones. However, a revocable living trust avoids the probate process, whereas a will does not. Unlike a will, a revocable living trust does not need to be administered by a probate court. By avoiding probate, an estate can essentially save numerous costs and assets will be distributed faster to family members and loved ones. In addition, a revocable living trust protects the privacy of the decedent as well as their finances. While court documents and the probate process are a matter of public record, a revocable living trust is handled outside of probate and is therefore kept private.

The attorneys at Hobson-Williams, P.C. are skilled in all aspects of elder law and are dedicated to representing clients with diligence and compassion during emotional times. Contact the experienced New York elder law attorneys at Hobson-Williams, P.C. for a consultation by calling them at 866-825-1LAW or vising them at www.thobsonwilliamslaw.com.

Do I Need to Make a Living Trust, or is my Will Enough?

Part of estate planning is determining how you will distribute your property and to whom at death.  It is very important to have a will, otherwise your property will be distributed by intestacy, and may not be distributed according to your wishes.  While wills and trusts have some elements in common, they serve two separate functions.

In New York State, a will is a written document that must contain a signature at the end witnessed by two people.  The purpose of a will is to name beneficiaries who will receive property after your death.  A will is revocable and can be destroyed by a physical act such as burning or tearing, by operation of law such as divorce, by presumption (for example, after your death the will cannot be found), or by a subsequent will.  Accordingly, a will may be revised many times during one’s life.  In a will, an executor for the estate and guardians for children may be named, and instructions for wishes to be carried out may be listed.  Upon death, a will goes through the probate process and becomes a public document.

A trust is a relationship between the person who funds the trust (the settlor), the trustee (the person who manages the trust), and the beneficiary (the person who benefits from the trust).  As a trust does not go through the probate process, it is much more private than a will.  Avoiding probate is both cost and time effective.   A trust also allows the beneficiary to enjoy gifts from the settlor of the trust during the settlor’s lifetime so that the settlor can see the enjoyment the beneficiary gets from it.  Additionally, a trust is a good option if you want to be able to distribute funds to children who have not yet reached the age of majority.  Generally, living trusts are revocable and allow for the continuous transfer of assets.  Another benefit of a living trust is that, unlike a will (unless you have appointed a power of attorney), if you become incapacitated, the trustee will take over.

It is best to consult with an experienced attorney to determine whether you should consider making a living trust.  Contact an experienced elder law attorney who can best assist you in planning your estate.  Call the Law Offices of Tanya Hobson-Williams toll free at (866) 825-1529 or (718) 210-4744.