Facing the reality of death or incapacitation may be challenging but its essential to have these conversations especially if you have young children or a non-traditional family structure. Ensuring your wishes are respected and your loved ones are protected is where estate planning comes into play. Both a will and a living trust can help you manage your estate and medical concerns in case youre no longer able to do so yourself. But how do you know? Is a living trust right for you and do you need one? How do you set up a will? Can a will and living trust be used together? To make an informed decision and navigate the complexities of estate planning consider reaching out to an experienced estate planning attorney in New York. At New York Legacy Lawyers our team of skilled New York estate planning lawyers may be able to guide you in choosing the most appropriate option and help you create a comprehensive plan tailored to your needs. Call us today at (718) 713-8080 to schedule a consultation. New York living trust lawyer What is a Living Trust? A living trust is a legal document created by the grantor the individual who contributes assets to the trust. The objective of a living trust is to maintain ownership of your assets during your lifetime. The general strategy involves moving as many assets as possible into the trust although certain assets like life insurance and retirement accounts are not eligible for inclusion. Once placed in the trust these assets are administered for your advantage throughout your lifetime. The responsibility of managing the trust falls upon a trustee of your choice. While you have the freedom to appoint anyone as the trustee it is common to designate yourself for full control. In addition you can also name a successor trustee who takes over the role after your passing. Once you pass away the trustee maintains management and protection of your assets and subsequently allocates them to your designated beneficiaries. One advantage of a living trust is its capability to avoid the probate. Probate involves court procedures for validating and executing a will which can be a time-consuming process that can take several months and become expensive over time. However a trust can eliminate the need for probate while also allowing you to orchestrate an immediate distribution of your assets through the trust terms. If youre curious about the intricacies of living trusts and how they can help you achieve your estate planning goals it is crucial to seek guidance from a skilled New York estate planning lawyer. At New York Legacy Lawyers our attorneys can help you understand the concept of a living trust and guide you through the process of establishing one that is tailored to your unique needs. We can provide clarity and peace of mind for your estate planning journey. Contact us today to discuss your specific situation and ensure that your assets are protected for the future. Complexity Living trusts and wills do not have to be terribly complicated. In many stateshandwritten willsare acceptable (though not advised). They become more complicated if you have significant assets such as property vehicles stocks or multiple potential family and friends who believe they are entitled to your assets. There are two forms of living trusts irrevocable and revocable. Irrevocable trusts arent as popular because once the papers are signed they cant be changed. They typically function as a means of protecting assets from a lawsuit or taxes. A revocable trust can be changed if you change your mind or as your financial situation necessitates. It offers benefits toward reducing the complexity of distributing assets after the death of the holder. Privacy A revocable living trust is a private contract between thetrustentity and trust holder. It helps your beneficiaries by enabling them to avoid probate the court process in place to distribute the assets after the death of the estate holder. In addition to the protection from probate trusts are private matters and not a matter of public record. Conversely when a will is filed with the court to begin probate it becomes public record. The assets and finances changing hands are open for anyone to see. Health A living trust manages your financial affairs during the end of your life and after death. A will handles affairs when you are gone. Those of advanced age or suffering from illness may consider a living will. A living willhandlesyour medical affairs should you be unable to advocate for yourself. You can designate whether or not you want to receive life-saving treatments like life support or CPR. This is the only time a living will is necessary. A living trust allows you to name a successor trustee in the event you become mentally incapacitated. If you have a same-sex partner thisgives your partner rightsto advocate for you and your estate. This also applies if you are unmarried but want to designate a friend or non-family member as your advocate. If you only have a will the court designates someone to handle your affairs. You can file for apower of attorneyto avoid this. Matters Involving Children Living trusts allow you to leave property to children. It is illegal for children under 18 to own property so you will have to designate a manager. Only a will allows the estate holder to arrange for their childrens guardianship and property. Your Estate After Death To designate property in a living trust you must transfer the property into the trust. For many items making a list and attaching it to the trust document is all thats required. Larger items that have a title document require that you rename the title to the name of the trust. You will need to name someone to wrap up your estate affairs after you die. In a will this person is called an executor. They are in charge of managing your assets and distributing them after probate. In a living trust the successor trustee manages the assets that are only in the trust. Mostestateswill require an executor even if most of the property is transferred to the trust. The executor of the will and a successor trustee can be the same person. Factors Living Trust Will Complexity Two forms: irrevocable and revocable. Revocable trusts can be changed while irrevocable trusts cant be changed once papers are signed. Handwritten wills are acceptable but not advised. It can become complicated if there are significant assets or multiple potential beneficiaries. Privacy A private contract between trust entity and holder and helps beneficiaries avoid probate. Becomes public record when filed with the court for probate. Health Manages financial affairs during the end of life and after death. Allows naming of successor trustee if mentally incapacitated. Handles affairs after death. Living will necessary for medical affairs if unable to advocate for oneself. Matters Involving Children Allows leaving property to children but requires a designated manager as children under 18 cant own property. Only a will allows for arranging childrens guardianship and property. Your Estate After Death Property must be transferred to the trust. Large items require renaming of the title to the trusts name. Successor trustee manages assets in the trust. Executor manages assets and distributes them after probate. Most estates require an executor even if property is transferred to the trust. Living Trust vs. Will The proper planning of your estate will protect your assets and your loved ones rights. Leaving it to the court will often end in disappointment for all parties. A living trust will help your family maintain privacy. It will also protect the rights of non-traditional family members. Trusts are often a little more difficult to contest in a lawsuit should an issue arise. A will allows you to make arrangements for young children after your death. You can also designate a manager for any property left to them. The answer to which you should choose between a living trust vs. will? A combination of both will provide you with the best options for caring for your estate and your family. Dont wait until its an emergency to plan your estate.Get startedwith us today. I. Introduction to Estate Planning A. Definition of Estate Planning Estate planning is the process of arranging for the management and distribution of ones assets and affairs after death. B. Importance of Estate Planning Estate planning ensures that your wishes are carried out regarding asset distribution and guardianship of minor children. It minimizes potential conflicts and legal complications among family members. Estate planning allows for tax planning and asset protection. C. Key Entities: 1. Testator The testator is the person who creates and executes a valid will or living trust. 2. Intestate Intestate refers to the condition of dying without a valid will or living trust. 3. Intestacy Laws Intestacy laws are state laws that govern the distribution of assets for individuals who die without a will or living trust. D. Overview of Asset Distribution and Beneficiaries Asset distribution involves transferring a persons assets to designated beneficiaries or heirs. Beneficiaries are individuals or entities named in a will or living trust to receive assets benefits or property from the estate. Proper estate planning ensures that assets are distributed according to the testators wishes minimizing disputes and ensuring the intended recipients receive their intended share. II. Understanding Wills A. Definition and Purpose of a Will A will is a legal document that specifies how a persons assets should be distributed after their death. The primary purpose of a will is to ensure that the testators wishes are carried out regarding the distribution of their assets and the appointment of guardians for minor children. B. Role of the Testator in Will Creation The testator plays a central role in will creation by making decisions about asset distribution guardianship and the appointment of an executor. They have the freedom to outline specific instructions for their assets and designate individuals or organizations as beneficiaries. C. Executor and Probate Process An executor is an individual appointed by the testator to carry out the provisions of the will and administer the estate. The probate process involves validating the will settling outstanding debts and taxes and distributing assets to beneficiaries. D. Handling Property Ownership and Privacy A will can address property ownership by designating how ownership should be transferred to beneficiaries. It may include provisions for the sale or distribution of specific properties. Wills are generally public records potentially affecting the privacy of the testator and beneficiaries. E. Protecting Minor Children and Guardianship Designation A will allows the testator to designate guardianship for minor children in the event of their death. It ensures that the testators wishes for the care and upbringing of their children are documented. F. Contesting a Will and Legal Considerations Interested parties may contest the validity or terms of a will under certain circumstances. Legal requirements and formalities must be followed to create a valid will and it is important to consider potential challenges during the drafting process. III. Exploring Living Trusts A. Definition and Purpose of a Living Trust A living trust is a legal arrangement where assets are held and managed by a trustee for the benefit of designated beneficiaries. The primary purpose of a living trust is to provide for asset management and distribution during the testators lifetime and after death. B. Benefits of Revocable Living Trusts Revocable living trusts offer flexibility as the testator can make changes or revoke the trust during their lifetime. They help avoid probate and allow for privacy in asset distribution. C. Trustee and Successor Trustee Roles A trustee is responsible for managing and distributing assets according to the terms of the living trust. A successor trustee steps in if the original trustee becomes unable or unwilling to fulfill their duties. D. Trustors Control and Flexibility The trustor retains control over the trust assets during their lifetime and can make changes as needed. Assets can be added or removed from the trust providing flexibility. E. Asset Management and Protection A living trust allows for centralized management of assets potentially simplifying administration. It may offer asset protection benefits such as protecting assets from creditors or ensuring their intended use. F. Incapacity Planning and Advanced Healthcare Directives A living trust can include provisions for managing assets in case of the trustors incapacity. Advanced healthcare directives within the trust can guide medical decisions. IV. Comparison: Wills vs. Living Trusts A. Probate Process and Cost Considerations Wills typically go through probate which can be time-consuming and costly. Living trusts may help avoid probate potentially saving time and money. B. Privacy and Public Record Wills are generally public records whereas living trusts maintain privacy. A living trust allows asset distribution to remain private and confidential. C. Avoiding Intestacy Laws and Trust Administration A will protects against intestacy ensuring asset distribution according to the testators wishes. Living trusts bypass intestacy laws and may simplify the administration process. D. Pour-Over Will as a Complement to Living Trusts A pour-over will ensures that any assets not included in the living trust are transferred to it upon the testators death. It acts as a safety net to capture any overlooked assets and maintain the overall estate plan. E. Asset Distribution and Beneficiaries Both wills and living trusts allow the testator to designate beneficiaries and specify how assets should be distributed. The chosen distribution method and flexibility may vary between the two estate planning options. F. Managing and Preserving Assets Both wills and living trusts provide mechanisms for managing and preserving assets for the benefit of beneficiaries. Considerations include the nature of the assets ongoing management and tax implications. V. Making the Right Choice A. Factors to Consider in Estate Planning Various factors influence the choice between a will and a living trust including asset complexity family dynamics and personal preferences. Other factors include tax planning privacy concerns and the need for flexibility. B. Individual Circumstances and Goals The individuals unique circumstances and goals play a significant role in determining the most suitable estate planning option. Factors such as age health family structure and financial situation should be considered. C. Consulting an Estate Planning Attorney Seeking advice from an experienced estate planning attorney can provide valuable guidance in making informed decisions. An attorney can assess individual circumstances explain legal implications and provide personalized recommendations. D. Reviewing and Updating Estate Plans Estate plans should be periodically reviewed and updated to reflect changes in personal circumstances tax laws and beneficiaries needs. Regular reviews ensure that the estate plan remains relevant and effective over time. E. Importance of Flexibility and Lifetime Management Flexibility is important in estate planning to accommodate potential changes in asset distribution and family dynamics. Lifetime management of assets is essential to ensure they align with the intended goals and changing circumstances. F. Balancing Complexity Cost and Personal Preferences The complexity and cost associated with wills and living trusts should be weighed against the desired level of control privacy and ease of administration. Personal preferences and peace of mind play a significant role in the decision-making process. Can You Have Both a Will and a Living Trust Many individuals wonder if they can incorporate both a will and a living trust in their estate planning strategy. The answer is affirmative and it can even be advantageous in specific situations. By combining a will and a living trust individuals can ensure that their assets are distributed according to their preferences and their loved ones future necessities are fulfilled. A living trust can provide more security to those who wish to evade probate or have minor children who might not be capable enough to manage their inheritance prudently if they receive it as a lump sum at a young age. On the other hand a will permits the nomination of a guardian for underage children which is not possible with a trust. A suggested approach is to use a will to finance the living trust with any assets that were not previously included in the trust before death. A pour-over will directs that any assets outside the trust at the time of death be shifted to the trust which will be supervised by a successor trustee for the beneficiaries advantage. This strategy guarantees that the assets intended for children are managed according to the creators directives. To identify the best course of action for ones unique circumstances its recommended to seek guidance from a competent estate planning attorney in New York. They can help navigate the complexities of wills and trusts and create a plan that meets both the individuals and their loved ones requirements. Contact us today at (718) 713-8080 to schedule a consultation. Living Trust vs. Will: A Look into the Best Choice for Your Situation 58 of Baby Boomers (ages 53-71) and 81 of those 72 or older have a living will or trust. They already see how smart it is to begin planning for the fact they will not be around forever. Likely this planning is tinged with years of experience watching family and friends go through the confusion and disputes that often arise over assets and estates when the original owner of them passes without making their wishes known. One estate planning tool that many of these baby boomers have turned to and that many more are looking at is a living trust. A living trust and a last will amp; testament often go hand-in-hand. Heres what you need to know about how they compare. Reach out to us at the New York Legacy Lawyers to consult with a skilled New York estate planning lawyer. Discover valuable estate planning tips and determine whether a will or trust is the best option for your situation. PROBATE IS DIFFERENT BETWEEN A TRUST AND A WILL Unlike a will a living trust is something you can use and benefit from while you are still alive. In a living trust you transfer some or all of your assets into the trust (as the grantor) then you manage the trust as the trustee and receive the benefits of the trust as the original beneficiary. Knowing that you may become incapable or unfit to manage your assets (trust) one day you can designate someone to be responsible for your property if and when you become mentally or physically unable to do so. When you pass away a successor trustee becomes responsible for carrying out the intent of the trust to whichever beneficiaries youve designated. You and your spouse will likely want to be co-trustees while you are still alive maintaining full control of your assets. Your spouse can take over if you become incapacitated. Most couples name their children as successor trustees in the event of their death. If they are uncomfortable with this arrangement they can appoint a professional to oversee their assets. While you are alive your living trust can be altered or dissolved at any time. Both a will and trust give detailed inheritance instructions and allow you to designate someone to oversee the distribution of your assets. With a will however your document will likely go through probate. This process can take months and become costly if it is contentious. Your assets will be tied up during this time. With a living trust the parts of your estate in the trust will not pass through probate court. Instead the person you have designated as your trustee will carry out the requirements you outlined in the trust. OPACITY=TRUSTS | TRANSPARENCY=WILLS Official documents such as a will and those that go through probate become a part of the public record. Living trusts will not be subject to public scrutiny unless a beneficiary or trustee demands court approval. Many people prefer that their wishes remain a private matter and a trust is a great way to keep the value and assets of your estate confidential. Why would that matter? Imagine youre leaving $2 million for your 15-year-old son to inherit when they turn 20 years old. You can imagine some people will want to share their ideas on how to spend $2 million with anyone new to that kind of cash on hand. Or worse if you wanted to leave that $ to your son but your estranged sister knew about it and preyed on their guilt to siphon some of it away. These are only two scenarios the point here is that the fewer people you have poking around your estate and knowing who received what the better-off the beneficiaries are likely to be. DIFFERENCE BETWEEN TRUST AND WILL Wills and trusts are legal documents that are commonly utilized for transferring assets to loved ones after ones death. Despite sharing some similarities such as the ability to modify or revoke them during ones lifetime the primary difference between these documents lies in their approach to asset distribution among beneficiaries. A will also known as a last will and testament designates an executor to manage the distribution of assets after death. In addition a will can also serve to appoint a guardian for minor children and outline funeral arrangements. However a will must go through the probate court process in order to be legally binding. This involves the court assessing the value of the property left by the will and approving its distribution to beneficiaries. Unfortunately probate can be time-consuming expensive and public as the details of the estate become part of the public record. On the other hand a trust establishes a relationship between the assets of the owner and a trustee who manages them for the beneficiaries. Assets placed in a trust bypass probate reducing court costs and the time required to receive inheritances. Furthermore trusts are private documents that cannot be viewed by anyone outside of the trust making them ideal for those concerned with privacy. Trusts offer greater control over the distribution of funds particularly for those with minor children numerous beneficiaries or concerns about their heirs spending habits. For example an individual may opt to distribute a childs inheritance over time to prevent overspending or delay the distribution of assets until the heir reaches a specific ageTrusts can also be beneficial in supporting someone with special needs without affecting their eligibility for government benefits. FOR ESTATES OF A CERTAIN SIZE TAX PLANNING IS CRITICAL Many folks with larger estates can take advantage of tax exemptions by dividing their assets smartly. Trusts and Wills have very different tax exposure risks. Make sure you choose to work with an estate planning attorney that knows about how taxes will affect your estate. 401K AND LIFE INSURANCE Many couples have a 401K or life insurance policy that they would like to leave to their children if they do not reach the age of retirement. If you have a will those funds would go into the hands of a court-approved guardian until your child reaches the age of 18. With a revocable living trust however a trustee can accept these funds in the event of your death. You can decide if your child receives them at age 18 25 or 30 or through some other manner other than age. THE LIVING TRUST AND THE WILL Whether you draw up a living trust or a will or likely both depends upon the size of your estate and the complexity of your situation. A little research and consideration will save you and your loved ones a lot of time and heartache. WE ARE HERE TO HELP. We want you to be able to discuss these topics with familiarity and confidence that you have an expert team of New York legacy lawyers supporting you and your family when you need it. Contact us today; well start you on your path to estate planning. via New York Legacy Lawyers by Yana Feldman and Associates https://yanafeldmanlaw.com/living-trust-vs-will-whats-the-difference-which-is-right-for-you/