Estate planning involves the preparation and strategic organization of your assets for their orderly distribution. It involves all your possessions such as tangible assets intellectual property investments automobiles business interests real estate properties and more. The role of an estate planning lawyer is crucial in helping you minimize uncertainties related to estate management while maximizing the value retained for your heirs. This includes reducing potential taxes legal fees and other expenses that could diminish the estates value. Engaging in proactive estate management both during your lifetime and after offers numerous benefits. In this article we will explore the difference between trusts and wills which are essential estate planning tools can provide security and advantages for you and your family safeguarding the value of your estate. At New York Legacy Lawyers our team of New York estate planning lawyers may be able to help you navigate this complex process ensuring the protection of your assets and the fulfillment of your wishes. Contact us today at (718)713-8080 to schedule a consultation. Brooklyn estate planning attorney Estate Planning Starts with a Last Will amp; Testament A Last Will and Testament is perhaps the most well-known part of any estate plan. A will is necessary as it helps in making a decision on which your property goes to when you pass on. In addition to providing for the transfer of assets you can also us a will to name Guardians for your children. As you consider drafting a Will you will need to think about the Executor. The Executor will be the person you would like to handle the process of carrying out your will (and working through probate). If you would like to know more about Wills prior to contacting us here is a more in-depth discussion on Estate Planning with Wills. You Can Also Create a Trust Another way to protect your assets in your estate plan is via a trust. A trust is a tool you place all your assets into and then become the beneficiary of it. When you pass away the trustee (person who has authority to manage your trust) distributes your property per your directions. Heres why trusts are so valuable to your estate planning. Trust assets do not have to pass through the probate process for the property to be transferred to the people you love. By skipping probate you avoid a public court process. Where a will becomes a public document open for others to look through and even fight over the assets and contents of a trust are more confidential. A well-crafted trust will likely save your family thousands in probate fees and potential legal costs from infighting. Here is a short article breaking down the difference between the types of trusts including: Trusts for Minors Special Needs Trusts Marital Trusts Revocable Living Trusts Irrevocable life insurance trusts Spendthrift trusts And more What Assets Cannot be Placed in a Trust? When establishing a living trust it is crucial to carefully evaluate which assets are appropriate for inclusion. Not all assets are suitable for transfer into a living trust as they may have specific legal and financial considerations. There are certain types of assets that are generally not recommended for placement in a living trust. Here are a few examples: Retirement accounts: Assets like 401(k) IRA 403(b) and certain qualified annuities should not be transferred directly into a living trust. Transferring these assets may result in income tax obligations since they require withdrawal. However you can designate the living trust as a beneficiary to facilitate the smooth transfer of funds upon your passing. Health savings accounts or medical savings accounts: These accounts are designed for tax-free utilization on eligible medical expenses and cannot be transferred to a living trust. Similar to retirement accounts you can designate the trust as a primary or secondary beneficiary. Active financial accounts: Unless you are the trustee with complete control over trust assets it is generally advisable to keep accounts used for monthly bill payments separate from the trust. This is because individuals may have concerns about potential delays in probate and the inability to quickly distribute these funds to heirs. Instead you can designate beneficiaries for these accounts using options like payable-on-death (POD). UGMA/UTMA accounts: If the trustee were to pass away before the minor a trust might be subjected to probate. In such cases it is advisable to consider appointing a successor custodian for these accounts. Vehicles: Generally everyday vehicles such as cars boats trucks motorcycles airplanes mules or snowmobiles are not typically included in a living trust. These assets often bypass the probate process and unlike collectible vehicles they do not appreciate in value. Additionally some states impose taxes during the retitling of vehicles and certain states do not permit vehicle owners to name beneficiaries after their demise. Assets that Cannot be Placed in a Trust Details Retirement accounts Assets like 401(k) IRA 403(b) and certain annuities should not be transferred directly to a living trust due to potential tax obligations. Health savings accounts or medical savings accounts Tax-advantaged accounts designed for medical expenses cannot be placed in a living trust. Designate the trust as a beneficiary instead. Active financial accounts Keep monthly bill payment accounts separate from the trust. Use beneficiary designations like payable-on-death (POD) for these accounts. UGMA/UTMA accounts Consider appointing a successor custodian for these accounts to avoid probate if the trustee passes away before the minor beneficiary. Vehicles Everyday vehicles like cars boats and motorcycles are typically excluded from living trusts. They bypass probate and dont appreciate. Get Help with a Will Trust Or Both! Wills amp; Trusts are both essential estate planning tools. They can get to be quite complex however. If you are actively looking into planning for your own future and for the future of your family then engaging the services of a highly rated and local estate planning law firm is your best bet. Yana Feldman amp; Associates PLLC would love to help you craft the perfect estate plan. Contact us today to set up your estate planning appointment. via New York Legacy Lawyers by Yana Feldman and Associates https://yanafeldmanlaw.com/wills-trusts-the-estate-planning-process-in-new-york/