With all the estate planning tools at your disposal, it may be overwhelming to decide which documents are best for you. More specifically, you may be unsure as to whether you should establish a trust or an inheritance, along with what the difference is between the two in the first place. Continue reading to learn whether a trust is better than an inheritance and how one of the experienced New York City trusts attorneys at Zimmet Law Group, P.C. can guide you in making a decision.
What is a trust?
Simply put, a trust is an alternative way for you (i.e., a trustor) to pass assets to your loved ones (i.e., the beneficiaries) all while under the regulation of a trusted third party (i.e., a trustee).
In New York State, there is a revocable trust, where a trustee can amend the trust throughout the lifetime of a trustor by adding or removing assets. This is so long as you approve of this while still of sound mind. There is also an irrevocable trust, where a trustee cannot change, amend, alter, revoke, or otherwise modify a trust after its creation. This is unless s beneficiary gives their explicit written consent to do so.
What is an inheritance?
Contrastingly, an inheritance is a plan that is usually included in one’s will. This allows you to pass down your cash endowments, real estate, stocks, and other assets in the way you wish to your loved ones once you have passed on. If you have not established a valid will before your passing, then these assets will be distributed according to New York State law.
Under what circumstances is a trust better than an inheritance?
A trust may be more beneficial than an inheritance left in a will because assets tend to be passed down to beneficiaries quicker and inexpensively. More specifically, it is quicker because it avoids court procedures carried out in the probate process. And then, it is inexpensive because they subsequently avoid court fees, legal fees, and significant taxation. Ultimately, this is of benefit if your beneficiaries need to pay off certain bills or property taxes almost immediately after your passing, which also allows for them to have more money to work with.
However, a trust is usually only used by those who have high-net-worth assets that they intend to distribute upon their passing. So, if you only have a small amount of money or assets that you wish to pass down, then you may want to opt for establishing an inheritance plan.
For more information on which path to take, you must consult with one of the skilled New York City inheritance attorneys today. We look forward to having this discussion with you.
