There are various different legal devices that are used to arrange for the transfer of financial assets after someone passes away. In New York, one option that is quite popular is the revocable living trust.
With a revocable living trust in Smithtown NY you retain incidents of ownership, and in certain ways this is a benefit. Because the trust is in fact revocable you can dissolve it and go forward with the assets that had been in the trust in any way that you choose.
When you create a revocable living trust in Smithtown NY you include the terms, and you choose a trustee and a beneficiary. You can change these terms, and you can change the trustee and/or the beneficiaries.
The bottom line is that you retain complete control of the trust while you are living. After you pass away the assets are distributed by the trustee to the beneficiaries according to the terms in a direct manner outside of probate.
Probate is the process of estate administration. Here in New York that process takes place under the supervision of the Surrogate’s Court.
People sometimes try to take steps to arrange for asset transfers outside of probate partially because it can be time-consuming. The heirs to the estate do not receive their inheritances until probate has run its course. You may want to see your family get their inheritances quickly.
Probate can also be costly because there are legal fees, court costs, accounting charges, executor fees, appraisal expenses, liquidation costs, etc.
Another reason why people often times look for ways around probate is the fact that everything that goes on during probate is a matter of public record. Anyone who is interested could find out how you planned your estate, including the press.
Because of the fact that you are taking assets out of your personal possession and placing them into a revocable living trust you may feel as though this will protect the assets from litigants and creditors.
There are those who also believe that you can reduce the value of your assets for Medicaid planning purposes by placing them into a revocable living trust.
In fact, revocable living trusts do not protect assets. As mentioned previously, you retain incidents of ownership when you convey assets into a revocable living trust.
You have the ability to revoke the trust and use the money for any purpose. This would include paying bills or satisfying litigants. Because you have this access the assets are not protected and they are fair game.
There are other things that can be done to protect your assets. If you’d like to gain an understanding of these asset protection strategies take a moment to contact our firm to schedule a free consultation.