Many New Yorkers might think that a will is a sufficient document for passing on assets to loved ones. However, a trust may be a better instrument in some situations. With a revocable trust, the creator has a lot of flexibility. An irrevocable trust gives the creator, or grantor, less control. However, this instrument may have uses not provided by a revocable trust.
A trust is private because it does not have to pass through probate. This also means that assets can go immediately to beneficiaries. However, a grantor might also specifically create a trust to keep the beneficiary from getting assets right away. This could be the case if the beneficiary is young, likely to be irresponsible or has issues with creditors. The trust might only allow the beneficiary to receive assets after reaching a certain age. Distributions could also be left up to the trustee. Creditors may be unable to get assets that are in a trust.
A trust can also protect a relative who has special needs and does not want to jeopardize government benefits. Receiving an inheritance could make a person ineligible for those benefits. If the funds are placed in a trust, however, they can be used for the beneficiary without affecting benefits.
Many people may be unaware of what additional documents they need in an estate plan and why. For example, powers of attorney for health care and finances ensure that there are people in place who can make medical decisions and handle an estate owner’s finances in cases of incapacitation. An attorney could help a client decide which estate planning tools may work for their situation.