Investors in New York might know how they would prefer to have their assets distributed after death, but they might have questions about the most appropriate way to plan it. One way to do this is by adding trusts to their estate planning, similar to adding a specialized tool to a toolbox for a specific purpose. The specifications of an irrevocable trust cannot be modified, but a revocable trust can be modified as often as the grantor wants during his or her lifetime.
Trusts can be established for specific purposes, such as special needs trusts, generation-skipping trusts, asset protection trusts, and credit shelter trusts. Although life insurance, property, securities and nonretirement bank accounts can be used to fund a trust, retirement accounts cannot be owned by a trust. Irrevocable trusts render certain assets untouchable, providing asset protection. Revocable trusts can avoid probate, and the grantor can appoint an entity or person to manage the funds.
Another benefit of trusts is confidentiality. A will becomes public knowledge to which anyone has access. In contrast, trusts can hold real estate without revealing ownership, and even art collections along with the funds to maintain the assets. It could protect various assets while preserving privacy. Trusts could help in saving taxes, though the expense of their administration should also be considered.
Estate planning and establishing trusts are typically complicated processes, and having the support and guidance of an experienced estate planning attorney is crucial. An attorney will know the New York case law or statutory provisions applicable to valid, executable estate plans. Furthermore, the attorney can also assist during annual reviews to ensure the documents remain current.