New York Probate Lawyer Blog
The importance of estate planning in New York has been examined in numerous articles in the New York Probate Lawyer Blog. An estate plan in a broad sense can be comprised of many documents such as a Last Will and Testament, Living Trust, Living Will, Durable Power of Attorney and Health Care Proxy. However, a deeper understanding of estate law and the intersection of different documents such as a Will and a Trust is required for the effective disposition of assets and the achievement of a person’s intensions.
This Blog has discussed how a Last Will controls assets that are owned by a decedent in his name alone at death. A bank account or real estate bearing only a decedent’s name is disposed of according to the terms of a Will. Joint assets or assets which name a pay on death beneficiary are not controlled by a Will but pass directly to the joint owner or beneficiary upon death. If there is no Will, assets solely in a decedent’s name are controlled by the New York laws of intestacy which direct which heirs are to receive the assets. Assuming, however, that there is a Will, a Trust may come into play regarding the disposition of an asset.
If an asset is controlled by a Will, there may be a provision in the Will whereby the estate asset is given to a Trustee of a Trust whose terms and provisions are spelled out in the Will itself. This is known as a Testamentary Trust. A Testamentary Trust may be created in a Will for a number of purposes. Most commonly, such Trusts are utilized to hold funds for minor children until they reach certain ages or for specific purposes such as education. The Trustee designated in a Will is appointed by the Surrogate’s Court just like an Executor of the Will. The Trustee is given certain powers and authority in the Will which must be adhered to. Testamentary Trusts can also be utilized for estate planning or to administer funds for persons under a disability. These are known as Supplemental Needs Trusts. A Charitable Trust can be created to benefit charities. The terms of a Testamentary Trust include details as to Trust asset dispositions, as well as the termination or final payment of Trust funds. There are very complex rules which provide that Trusts cannot continue in perpetuity.
Sometimes a person may create a Trust outside of a Will. In general, these Trusts are known as Inter Vivos Trusts. Such Trusts can take many forms and be used for varied purposes. One of the most common Inter Vivos Trusts is known as a Living Trust or Revocable Grantor Trust. In general, these types of Trusts are used for many purposes but principally to avoid the probate process. Unlike a Will, a Living Trust does not need to be approved by a Court upon a person’s death unless someone challenges the validity of the document. These Trusts are meant to be self-operating. Upon the creator’s death, the Trust typically provides specific terms for the disposition of the Trust assets. In order for such Trusts to be effective, the creator must transfer title to various assets, such as stocks, financial assets and real estate into the Trust ownership. I have seen many instances where a person creates a Living Trust but fails to transfer all or any assets into the Trust. As a result, the un-transferred assets remain in the sole name of a decedent and require a Will to be probated or intestate administration in order to effectuate a transfer to beneficiaries.
The intersection between Wills, Estates and Trusts can be very complicated. Multiple documents along with asset transfers and confusing or conflicting provisions can create litigation in the Surrogate’s Court and delay estate settlement.
I have represented clients in estate and trust matters for over 40 years. Do you have an estate or trust issue? Call me now for a free confidential review of your question. We provide reasonable and flexible fee arrangements and personal representation.
New York Trusts and Estates Attorney Jules Martin Haas has helped many clients over the past 40 years resolve issues relating to guardianship and probate and estate settlement throughout New York City including Bronx, Queens, Brooklyn, Manhattan, Nassau and Suffolk Counties. Call (212) 355-2575 for an initial free consultation.