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The use of trusts to protect assets in an estate plan in New York

Investors and others with many assets who are creating an estate plan may need to use trusts to protect those assets. This can be important because without effective estate planning, as much as half of an estate's value may be lost to taxes when assets pass to beneficiaries.

It may be best to work with a professional to create an estate plan and trust to avoid errors. One common mistake is failing to fund the trust. After creating the trust document, it is necessary to title the assets in a way that makes them the property of the trust.

Some people may want to create what is known as a charitable remainder trust in order to donate to a charity. This type of trust also has benefits for the creator. For example, the creator may use the trust for a wide variety of investments, and the trust may generate income for the creator that has tax advantages. However, there are also limitations. This type of trust must be irrevocable, meaning that it cannot be dissolved.

Another advantage of a trust for some people is that it means the estate does not have to go through probate. If privacy is particularly important to a family or if it is important for assets to be distributed quickly, a person might want to look into a trust to avoid probate. However, in other cases, the trust could end up being significantly more expensive than the probate process. Furthermore, a will may be sufficient in some cases. An attorney might be able to advise a person as to the advantages and disadvantages in any particular situation. Usually, in a will, a person is appointed as executor to oversee the probate process and distribution of assets, and the executor may also want to work with an attorney on probate administration.

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