Living trusts have become a popular estate planning tool, and are frequently touted as a way to avoid the New York probate court, called Surrogate’s court. Creating a will seemed, well, almost unfashionable for years. But do you need a will, a living trust, or both?
Unlike a will, a living trust is not just a document, it is a legal entity, like a corporation or a partnership. After you create a trust, you can transfer your property, your home, financial instruments and/or other property, into the trust and then specify who is to receive them after you die. You are even able to exercise some control over how and when they will receive it. Creating a living trust allows you to take your assets out of your own name, while keeping them under your control. Since probate only applies to property held in your own name, the property transferred to the trust avoids probate.
People who set up living trusts often name themselves as the trustee in charge of the trust, although they can name any adult. You can also name a person or institution as a successor trustee to manage the trust if you are incapacitated. If you are unable to handle your own financial affairs, the successor trustee can take over for you. This allows you to avoid a guardianship or conservatorship proceeding, which is a court-ordered process to appoint someone to handle your affairs if you can no longer manage them on your own.
Living trusts aren’t right for every estate. For people without significant property or any children, they may not be worth the time and expense. There are also estates that may very well be better off with the court supervision of probate.
No matter which estate planning tool you choose to transfer your property upon your death, you will still need a will to handle other tasks. A will is still used to name an Executor for your estate or a Guardian for minor children, as well as to address any property that may not be owned by the trust.
Work with an estate planning attorney to determine the best estate planning tools for your specific situation and needs.