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Many people have preconceived notions about what a Trust is, what it does and who needs one.
You may think that only multi-millionaires who want to leave large trust funds for their children
benefit from a trust. The truth is, trusts can be invaluable in your estate plan even if you are of
more modest means. However, not everyone needs a trust and anyone who tells you that may not
be looking out for your best interests.


A trust is a legal entity, similar to a corporation, which is used to hold property on behalf of
another party. In the estate planning context, the trust is generally created by the person doing the
estate planning, (the settlor or grantor), who authorizes another party (the trustee) to manage the
assets which are placed into the trust for the benefit of the beneficiaries. There are many types of
trusts, just as there are many reasons for establishing a trust. Some common types of trusts in an
estate planning context are as follows:


Revocable Living Trusts: Revocable Trusts are primarily used to avoid probate when it is
anticipated that the probate process may be particularly expensive, time consuming and
cumbersome. For example, if you intend to disinherit an heir, for example a child, a revocable
trust will make that easier for your remaining beneficiaries. Additionally, revocable trusts are
also useful to provide for a person’s incapacity in the future, or if you do not have any living,
immediate family members.

Irrevocable Trusts: Irrevocable trusts are generally used for medicaid planning and long term
care planning and are therefore, very restrictive. As the name implies, once created, Irrevocable
Trusts can not be changed, except in very limited situations, and therefore your choice of a
Trustee must be carefully considered.


Special Needs Trusts: Special needs trusts are used to enable a person to leave assets to a loved
one with a disability while also maintaining the disabled person’s governmental benefits, such as
Supplemental Security Income (SSI) and medicaid programs. Special needs trusts protect the
individual’s benefits while also allowing them to have extra money for special needs such as
vacations, electronics, personal care attendant, transportation and many other life-enhancing
expenditures.


Marital Trusts: Many married couples may include trusts in their wills, or separately, for the
benefit of their spouse, typically for tax purposes or asset protection. Marital trusts allow some
couples to take advantage of estate tax exemptions. Additionally, marital trusts may also allow a
spouse to provide for children from a previous marriage, while permitting a current spouse some
limited use of an asset, such as the option of living in a home for her lifetime.
Irrevocable Life Insurance Trusts: Also known as ILITs, are frequently used to remove the
value of a person’s life insurance policy from their taxable estate for estate tax reasons.

Irrevocable Life Insurance Trusts: Also known as ILITs, are frequently used to remove the
value of a person’s life insurance policy from their taxable estate for estate tax reasons.
Spendthrift Trusts: Frequently included within other trusts, spendthrift trusts are generally
established to protect the beneficiary’s assets from their creditors and even from themselves, in
some cases.


Trusts for Minors: Many people leave assets to their children as part of their estate plan. The
use of a Trust is desirable when you want to insure the money is available for the child’s benefit
while they are younger, for example to fund their education, provide support and pay for medical
expenses, and then providing the assets to the child directly once they achieve a certain age or
goal, for example, attaining a bachelor’s degree or turning 21 (or any age your choose).


Testamentary vs. Inter-vivos Trusts: Most trusts discussed above can be created as a stand
alone document during your lifetime (inter-vivos), or they can be created in your will, in which
case the trust comes into existence at the time of your death (testamentary).

WHAT IS A WILL CONTEST
When a loved one passes away with a Will, his or her estate goes through a court-managed
process called probate, where the assets of the deceased person are managed and distributed.
Although every probate estate is unique, most involve the following steps:
* Filing a petition with the proper Surrogate Court seeking to admit the will to probate and to
appoint an Executor, (the representative of the estate).
* Notifying legal heirs and beneficiaries under the will that the will is being “probated”.
* Inventory and appraisal of estate assets by the Executor
* Sale and/or liquidation of estate assets as required
* Payment of estate debts and expenses
* Distribution of assets to the beneficiaries of the estate

What happens if someone objects to the will?
An objection to a will is also known as a “will contest”. A will contest can be incredibly
costly to litigate. In order to contest a will, the “objectant” must have legal standing to raise the
objections. This happens when, for example, children receive disproportionate shares under a
will, or when distribution plans change from a prior will to a later will. Will contests can also be
a disagreement over the person designated to serve as the Executor. Unless resolved between the party seeking to admit the will to probate (“Petitioner”) and the party “contesting” the will, the Surrogate Court will determine whether the proposed will was properly executed, whether the decedent had the appropriate legal capacity to execute the will and whether or not there was any fraud, undue influence or distress involved in the execution.
However, simply because you may not be happy with the terms of a loved one’s will, does not
necessarily mean you will be successful in “contesting” the will. We have many years of
experience representing clients who are looking to contest a will, as well as those who are
seeking to have the will admitted to probate. We will always give you an honest assessment of
your likelihood of success in either situation.

How much does Probate or Administration cost?
The cost and duration of the probate or administration process can vary significantly
depending on a number of factors, such as the value and complexity of the estate, the existence of
a will and the location of real property owned by the decedent. Will contests or disputes with
alleged creditors over the decedent’s debts can also add significant cost and delay. Common
expenses of an estate include executors fees, attorneys fees, accounting fees, court costs,
appraisal fees and surety bonds. During a free, no obligation consultation with our firm, we will
be able to provide an accurate estimate of both the cost and time involved in your matter.

 

 

 

 

 

You are not alone if you do not want to think about death or disability. However, establishing an estate plan is one of the most important steps you can take to help protect yourself and your loved ones. A proper estate plan will put you in charge of your finances. More importantly, an estate plan can also spare your loved ones the expense, delay and frustration frequently associated with managing your affairs when you pass away or become disabled. We can help you to develop and implement your estate plan while working to reduce the anxiety and stress often associated with this process.


A well-crafted estate plan will provide for your loved ones in an efficient and effective manner by avoiding the need for a guardianship during your lifetime, a costly probate or administration process on your death and the payment of unnecessary estate taxes. We offer a free consultation which will allow us to review your family and financial situation with you, examine your goals and have your various options explained to you in a simple and relaxed manner. Ultimately, once your estate plan is properly in place, you will have the peace of mind knowing that you have provided for yourself and your family just in case the unthinkable happens.

 

Probate vs. Administration

Many people are understandably confused about what happens to their assets when they pass away. If you execute a Will, your assets will pass to your designated beneficiaries through the Probate Process. If you die without a Will, your assets will pass to your legal heirs through the Administration Process. The law of New York State will determine who your legal heirs or “distributees” are. Therefore, if you do not have a will, you will not be able to decide for yourself who should receive your assets upon your death.
Unfortunately, in some situations the Probate Process can be long, costly and stressful for your beneficiaries. Therefore, in some situations you may decide that it is better to try and avoid the
Probate Process altogether. With proper planning, your assets can pass to your loved ones without having to go through the probate process, in a quick, inexpensive and private manner.

 

 Providing for Incapacity


If you become incapacitated and can not manage your own affairs, contrary to what many people believe, your spouse or your children will not automatically be able to take over for you. In order
for others to be able to manage your finances, they would have to petition the court to declare you legally incompetent and seek to be appointed your guardian. This can be a very lengthy and
expensive process. Even if the court appoints the person you want them to, that person will still need to report back to the court on a regular basis to explain how they are spending your money.
In order to avoid this, you may designate the person or persons you trust through the proper legal documents, often a Durable Power of Attorney, so that they will have authority to manage your
affairs.

In addition to planning for the financial aspect of your incapacity, you must also consider your medical needs. The law permits you to appoint someone, for example a family member or close
friend, to make medical decisions for you when you are no longer able to do so. The appropriate document to do this is a Health Care Proxy. Additionally, a Living Will sets forth your specific
wishes so that your loved ones will know what your preferred medical treatment is and whether you favor the use of extraordinary measures in case you become permanently unconscious or terminally ill.

 

Providing for Minor Children


If you have minor children, it is important that your estate plan addresses issues regarding their upbringing and financial well being. You may want to consider a plan that will allow your
surviving spouse time to devote more attention to young children, without the burden of work obligations. You should also plan for the unthinkable possibility of you and your spouse dying
simultaneously, or within a short period of time. A proper contingency plan will name the person you would like to manage your assets, as well as be the guardian of your children. These need not be the same person. In fact, many times you will want to name different people in order to implement a system of checks and balances. Although this is a very difficult issue for many
people to think about, if you do not have a proper plan in effect, the court will decide who should raise your children and manage your finances. Additional issues you will want to consider are whether you want your beneficiaries to receive
your assets directly, or whether you would prefer to have your assets placed in trust and distributed based on any number of factors you will designate, such as age, need, incentives
based upon behavior or education. Too frequently, children inherit substantial assets before they are mature enough to handle them properly, often with devastating results.

 

Charitable Bequests


A proper estate plan may also allow you to benefit your favorite charitable organization or cause. You may do this is in a variety of ways, both during your life and upon your death. Depending on
your specific needs, your charitable giving plan may also be set up to provide an income stream for your life, earn a higher investment return or reduce your capital gains or estate taxes.


Planning for Estate Taxes


Whenever an individual passes away there is the possibility Estate taxes may be due to either their state of residence and/or the federal government. Whether or not estate taxes are due will
depend upon the size of the estate and who the beneficiaries are. There are many different effective strategies that can be utilized in order to reduce or eliminate estate taxes. However, the planning process must begin early in order to be effective.

 

 

 

 

 


You are not alone if you do not want to think about death or disability. However, establishing an estate plan is one of the most important steps you can take to help protect yourself and your loved ones. A proper estate plan will put you in charge of your finances. More importantly, an estate plan can also spare your loved ones the expense, delay and frustration frequently associated with managing your affairs when you pass away or become disabled. We can help you to develop and implement your estate plan while working to reduce the anxiety and stress often associated with this process.


A well-crafted estate plan will provide for your loved ones in an efficient and effective manner by avoiding the need for a guardianship during your lifetime, a costly probate or administration process on your death and the payment of unnecessary estate taxes. We offer a free consultation which will allow us to review your family and financial situation with you, examine your goals and have your various options explained to you in a simple and relaxed manner. Ultimately, once your estate plan is properly in place, you will have the peace of mind knowing that you have provided for yourself and your family just in case the unthinkable happens.

 

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