In New York, there are different ways a person can set up their estate plan in order to protect the future of their assets. This can vary depending on what the individual wants from their estate plan. One way this can be done is with the creation of a trust. During this time, it is important to retain the services of an experienced New York estate planning attorney for guidance.
What is a Trust?
When a person creates a trust, they are known as a trustor. On the other end, the person who receives the assets within the trust is known as a beneficiary. In addition to this, there is a third-party who is in charge of managing the trust on behalf of the beneficiary. This individual is known as a trustee. Simply put, a trust is an arrangement that gives a trustee the right to take care of the assets within a trust until the beneficiary can inherit them.
Types of Trusts
When creating a trust, it is important to know that there is not a one size fits all situation. There are different types of trusts that have their own purpose in order to allow a trustor the opportunity to create one specifically for the person or entity who will inherit it. The types of trusts that can be created in New York can include:
- Revocable Trust: This is a common choice because it can be modified, changed, or terminated at any moment without the permission of the beneficiary.
- Irrevocable Trust: This requires a trustor to give up their rights to the trust when it is created. This means they cannot change or terminate it at all.
- Irrevocable Life Insurance Trust: This allows a trustor to remove their life insurance from the estate plan so the beneficiaries are free from any taxes placed on it.
- Charitable Trust: There are two types of charitable trusts. A charitable leads trust allows the individual’s choice of charity to receive interest from the financial gift for a period of time. When it ends, the remaining assets may go to family or other beneficiaries. A charitable remainder trust allows charities to receive a trust’s assets at the end of its term. Until the end, the donor receives interest on the gift.
- Special Needs Trust: This can be created for a loved one with a disability to make sure they receive the financial support they need throughout their life.
Contact our Firm
Zimmet Law Group, P.C. is an experienced team of attorneys guiding clients through matters of estate planning and administration, divorce and family law, real estate, commercial litigation, business law, bankruptcy, and landlord-tenant law. If you require the services of an effective New York City attorney, contact our firm today to schedule a consultation.