An estate plan is an important set of legal documents and tools that can help New York state residents identify and distribute their assets upon their death. There is no single right way to prepare an estate plan as all individuals have different needs, preferences, and expectations for how their estates should be managed after they are gone. Preparing an estate plan that meets a person’s requirements can often be accomplished with the advice and guidance of a knowledgeable estate planning attorney.
Like wills, trusts are common tools that allow individuals to pass on money, property, and other assets according to their wishes but also allow individuals to maintain some control over their wealth while they are alive. There are many different kinds of trusts that serve different estate planning needs, and before a person creates one, they can benefit from discussing their options with a legal professional. This post does not provide a complete list of all kinds of trusts. It may be used as a general reference but should not be read as legal advice.
Revocable vs. Irrevocable Trusts
Trusts can be revocable, which means that they changed or revoked during the trust creator’s life. They can also be irrevocable, which means that once they are created, they cannot be changed or withdrawn. The decision to create a trust as revocable or irrevocable can have significant bearing on how a person can interact with their property before they pass away.
A charitable trust is one that benefits a charity upon the death of the trust’s creator. Often charitable trusts are set up as remainder trusts, meaning that the remainder of a charitable trust will be provided to the charity upon the creator’s death. Charitable trusts often avoid tax implications and can help individuals support the causes they care about even after they are gone.
Special Needs Trusts
Individuals who suffer from disabilities and other ailments that prevent them from supporting themselves can sometimes receive benefits from the government to help sustain them. Unfortunately, when these individuals receive gifts and inheritances, that income can be counted against their eligibility for government support. A special needs trust helps a person provide financial support for a loved one in need without jeopardizing their options for seeking benefits from government entities.
Unlike other trusts which may vest interests in beneficiaries, spendthrift trusts do not. The beneficiary of a spendthrift trust cannot sell or give away their trust interests, thus ensuring that they will benefit from the proceeds of the trust as intended by the trust’s creator.
Trusts can be useful tools for individuals who wish to prepare comprehensive and personal estate plans. More information on trusts can be sought from estate planning attorneys.