It’s a strange feeling, thinking about the future when everything seems fine right now. You’re working, you’re healthy, life is steady, yet, some part of you knows it won’t always be that way. Maybe you’ve seen a friend struggle to sort through a loved one’s estate, or maybe you’ve heard horror stories about probate dragging on for months, sometimes years. That’s why it’s so important to have a valid and enforceable trust. Here at Raimondo & Sundquist LLP, our Buffalo trust lawyers are dedicated to helping clients get the peace of mind they deserve. Contact our estate planning lawyers for an initial consultation today.
What is a Trust and How Does it Work?
At its core, a trust is a legal arrangement. One person, called the grantor, creates it. Another, called the trustee, manages it. And the people who benefit are known as the beneficiaries. That’s the basic structure, but what makes it truly valuable is control.
When you place assets, such as a home, bank accounts, or investments into a trust, you’re giving those assets a form of protection. You decide who receives what, and when. And you decide who is in charge of carrying out those wishes. The trustee has a fiduciary duty, meaning they must always act in the best interests of the beneficiary.
In other words, a trust allows you to keep ownership and management separate. You’re still in control while you’re alive, but you’ve also created a pathway for how things will be handled when you’re not.
Common Types of Trusts in New York
Not all trusts serve the same purpose. Some give flexibility, others provide protection, and a few do both. Some of the most common types of trusts that we see are as follows:
- Revocable Living Trusts: These allow you to stay in control during your lifetime. You can modify or revoke them at any time. When you pass away, the trust becomes irrevocable and your assets transfer directly to your beneficiaries, with no probate required.
- Irrevocable Trusts: These are permanent once created. Because you give up ownership of the assets placed inside, they can provide strong asset protection and potential estate tax benefits.
- Testamentary Trusts: These come into effect after your death through your will. They’re often used to manage funds for minors or for beneficiaries who aren’t ready to handle a large inheritance.
- Special Needs Trusts: These allow you to provide for a loved one with a disability without affecting their eligibility for government programs like Medicaid or SSI.
- Charitable Trusts: These are designed for giving, helping you support a cause you care about while potentially reducing estate or income taxes.
- Spendthrift Trusts: These help prevent a beneficiary from spending their inheritance too quickly or losing it to creditors.
- Qualified Personal Residence Trusts (QPRTs): These are used to transfer your home out of your estate while allowing you to continue living there for a set number of years.
Why Create a Trust?
There are plenty of reasons to establish a trust, and not all of them are complicated. Sometimes it’s about protecting your children. Other times, it’s about avoiding unnecessary costs, taxes, or headaches down the road. Some of the most notable benefits that trusts can provide are as follows:
- Avoiding Probate: When assets are held in a trust, they don’t go through the probate process. This means faster distribution, lower costs, and more privacy.
- Protecting Beneficiaries: If a child, spouse, or dependent isn’t ready to manage money responsibly, or is vulnerable to creditors, a trust keeps their inheritance secure.
- Reducing Estate Taxes: Certain trusts can minimize the taxable value of your estate, leaving more for your family.
- Maintaining Control: You decide exactly how and when assets are distributed. It’s your voice, carried forward.
- Planning for Incapacity: Should you become unable to handle your affairs, your trustee can step in without court intervention.
- Protecting Privacy: Unlike a will, a trust isn’t a public document. Your financial affairs and beneficiaries remain confidential.
How Do I Set Up a Trust in New York?
Creating a trust isn’t something you should try to do on your own; it’s always best to have a knowledgeable team of trust lawyers in your corner. While the process varies from case to case, it generally looks something like this:
- Define Your Purpose: Start by identifying what you want to accomplish, whether it’s protecting assets, avoiding probate, or caring for someone special.
- Select the Type of Trust: Based on your goals, your lawyer will help determine the right structure.
- Choose a Trustee: This person or institution will manage the trust. Ensure you choose someone responsible and capable of faithfully carrying out your wishes.
- Draft the Trust Agreement: Your attorney will prepare the official document, which lays out all terms and conditions, including who benefits and how the assets are to be handled.
- Fund the Trust: This step is crucial. You must transfer ownership of your assets, like deeds, titles, or accounts, into the trust’s name.
- Sign and Notarize: Once executed, your trust becomes legally binding.
- Review and Update Over Time: If it’s a revocable trust, you can make changes as your life evolves.
Contact Our Erie County Trust Lawyers
If you’re ready to take the next step toward protecting your family’s future, please don’t hesitate to contact the knowledgeable Buffalo, New York trust lawyers here at Raimondo & Sundquist LLP for an initial consultation today. We’re here to ensure your wishes are honored, your assets are protected, and your loved ones are secure.
