NEW YORK TRUSTS ATTORNEY
There are different kinds of trusts for different purposes.
Trusts are not only for the wealthy. A properly drafted trust can achieve a number of estate planning goals.
A revocable trust, also called a lifetime trust, can be an alternative to a will. Such a trust has a number of advantages. If Medicaid has paid for your long term care, a revocable trust may keep Medicaid from imposing a lien on your home, or from trying to recover all or part of its value from your heirs.
Such a trust also avoids the necessity of probate. Probate is the process of “proving” a will and carrying out its instructions. The court supervises this process, which can be time-consuming and costly. A revocable trust, together with a will leaving your property to the trust, makes probate unnecessary.
Probate proceedings are also a matter of public record. A revocable trust keeps your estate out of the courts. This kind of trust can spare your family publicity, as well as the time and expense of probate .
An irrevocable trust can be useful for long term care planning [link to Long Term Care page]. With this kind of trust, you give up ownership of your assets, while still retaining a measure of control. The assets in trust pass to your heirs upon your death.
An irrevocable trust is not for assets you will need to live on in the short term. However, it is a good solution for assets you intend to pass on to your heirs. After the five year Medicaid “look back” period has passed, assets in trust are protected from the potential cost of long term care.
A supplemental needs trust is an important planning vehicle for a disabled child or loved one.
A spendthrift trust is a way of leaving property to a child or loved one who may not be able to handle money independently. With this kind of trust, you appoint a trustee to handle the money for them. You also set the conditions upon which the beneficiary receives the money.
For example, assets can be released when the beneficiary reaches a certain age, or in steps when he or she reaches certain ages. Another condition could be that the beneficiary is gainfully employed. This encourages self-reliance, while still passing the assets in trust to the next generation.