How Does a Trust Work?
Trusts are valuable estate planning tools if you want to ensure your children or other relatives receive their share of your estate. However, choosing whether to center your estate plan on a trust or a will can be tricky. Trusts can be independent from a last will and testament but often work hand-in-hand with them.
Often, trusts are used to ensure that children or grandchildren have the funds they need to go to college, or to fund a local charity, provide a down payment on a business or home, or even to provide a safety net for your assets as you age. And this is not nearly all the ways a trust can be used. Trusts are incredibly versatile financial tools that will offer long-term benefits to those who receive them. Consulting an experienced Brooklyn trust planning lawyer can help shed more light on how trusts can be a helpful addition to your estate plan. Our skilled Brooklyn estate planning attorneys at New York Legacy Lawyers are ready to help you understand how trusts can help in achieving your estate planning goals.
Here is a short article covering the nuts and bolts of how a trust works.
Placing Assets in a Trust
If you decide to put your assets in a trust, you will need to determine what type of trust to choose.
Living trusts are established during your lifetime. You will maintain control over the assets that are placed within the trust, allowing you to add or remove them as needed.
A testamentary trust is established after your death as part of your last will and will ensure that the chosen beneficiary receives their portion of your estate in the manner set within your will. They may receive a large part at the beginning followed by smaller amounts over time or when they receive a designated age.
There are, as mentioned earlier, many more types of trusts to consider. Contact us today and we can go over what kinds of trust would meet your needs. In the meantime, here’s some more information on trusts for you.
| Type of Trust | Description |
|---|---|
| Living Trust | Established during your lifetime. Allows you to maintain control over the assets placed within the trust, with the flexibility to add or remove assets as needed. Provides access to assets as long as you are alive. Can be closed or modified if necessary. |
| Testamentary Trust | Established after your death as part of your last will. Ensures that chosen beneficiaries receive their portion of your estate according to the terms set within your will. Beneficiaries may receive funds in stages or upon reaching a designated age. |
Maintaining Control of Your Assets
Living trusts allow you to maintain control of your assets. Because this type of trust is established during your lifetime, you have the option of continuing to use the assets or to set them aside and allow them to build interest.
As long as you are alive, you will have access to the assets held within the trust. You can add or remove things as needed. You can also close the trust if you change your mind and decide to alter how your money is dispenced, or if you need the funds for personal use.
Trusts as Part of a Will
Testamentary trusts allow you to provide for the needs of a loved one in a structured and secure manner. Trusts can be set up in a variety of ways, depending on the situation. If you have young children or grandchildren, establishing a trust through your will ensures that their financial needs are taken care of after you have passed away. Your testamentary trust may include securing their care and meeting their needs if they are a minor.
One example of how a testamentary trust might be used: establishing a college fund that will enable someone to afford for their college and living expenses.
Taking Care of Those You Love
Trusts are a great way to secure the future of your loved ones. For parents with young children, creating a trust through their last will enables them to make sure all of the expenses of taking care of their minor children are taken care of, allowing the children to live as full a life as possible.
What is the Name of the Trust?
A trust can be used by an individual to hold assets for the advantage of another. Because a trust gives people more discretion over how their assets are managed and distributed, it is a crucial estate planning tool. By creating a trust, grantors can make sure that even after they pass away, their assets are used to benefit their loved ones in the way they wish. Additionally, trusts can aid in tax planning and asset protection to prevent potential problems such as lawsuits, bankruptcy, or other creditor actions from happening.
There are numerous things to consider while naming a trust. It is preferable to refrain from using names that might be mistaken for those of already-existing entities or individuals. Clarity may be improved by descriptive names, particularly if the trust has a clear objective or goal. Think about how long the trust might last and whether the name you select will still have value in the future.
A knowledgeable estate planning attorney should be consulted if you are thinking about creating a trust. A lawyer can assist you in creating a trust that satisfies your unique requirements and objectives and in understanding your possibilities. Additionally, lawyers can offer advice on trust naming and guarantee that the trust conforms with all relevant legal requirements.
Establishing a trust is a critical component of estate planning. Working with an estate planning attorney can help you set up your trust properly and guarantee that your assets are managed and distributed in line with your preferences. If you require assistance with estate planning, don’t be hesitant to consult a qualified estate planning attorney.
What Happens When One Co-Trustee Dies
When a co-trustee passes away in the state of New York, the overall effectiveness of the estate plan does not immediately cease. Rather, the legal responsibilities and duties that were previously shared amongst the co-trustees typically transition to any remaining co-trustees or to a successor trustee, if one has been specifically named in the trust agreement.
The surviving co-trustee(s) in such scenarios is entrusted with the full control and management of the trust’s administration. This ensures that the trust continues to operate smoothly without significant disruption. They will effectively manage all trust assets, make distributions as necessary, and handle any other administrative tasks that were once the responsibility of the deceased co-trustee.
In situations where the trust document does not designate a successor trustee, or in the event that all co-trustees have passed away, the probate court may step in to appoint a new trustee. This is done to ensure that the trust does not become leaderless, as this could lead to mismanagement and eventual erosion of the trust assets.
It’s important to note that this transition process may not always be straightforward. The language of the trust document and the specifics of the situation can introduce complexities that require careful navigation and understanding. Therefore, it is always advisable to engage an experienced New York trust planning attorney when dealing with the death of a co-trustee.
Call Yana Feldman & Associates if You Want to Learn More!
If you have questions about establishing a trust (either living or testamentary), contact Yana Feldman & Associates today!
We have over 15 years of experience supporting families like yours. And we understand how important it is to take care of your family.
Trusts are just one of many types of financial resources you can use to secure the future of your loved ones. It’s essential that you work with an attorney who specializes in this type of law.
Contact and schedule a consultation today.
via New York Legacy Lawyers by Yana Feldman and Associates yanafeldmanlaw.com/how-does...
