New York residents who are beneficiaries of a trust must generally be given information about the trust from the trustee. However, the scope of what must be revealed may be limited in a silent trust. Silent trusts are irrevocable trusts, and they are designed to prevent younger beneficiaries from knowing what is in them. Information about the trust may be withheld from beneficiaries until they reach a certain age or after a certain amount of time has passed.
A silent trust may be ideal for those who wish to prevent their children or grandchildren from talking about family finances. Taking such a step can add a layer of privacy for those who want to stay out of the spotlight. In some cases, parents may want to create a silent trust to avoid any negative consequences for a child’s personal or professional lives.
For instance, children who know about a future inheritance may choose to not work or be productive. If friends or colleagues know about a child’s future wealth, he or she could be the target of lawsuits or other schemes to obtain a part of that wealth. There may be benefits to a silent trust for the trustee as well. If a younger beneficiary doesn’t know about the document, it will be impossible to make unreasonable demands of the trustee.
The use of an irrevocable trust may help a parent protect assets from creditors or others who want to make a claim on them. This level of protection comes from the fact that the individual who put an item into such a trust no longer has control over it. Instead, the trustee determines when distributions are made and other decisions based on trust language. An attorney may answer questions a person may have about different types of trusts.