To fund your living trust, you need to transfer assets into your trust. You can transfer money and property into your trust by placing title to your bank account and title to your real property into the trust. You must specifically identify the property and accounts within your trust.

In addition to properly funding your living trust, you need to appoint an individual or trust company to oversee and administer your living trust. The New York Estates, Powers and Trusts Law governs the administrative duties of trustees. Specifically, Article 7 of the New York Estates, Powers and Trusts Law sets forth the specific rules governing trusts. Part 2 of Article 7 establishes the specific duties and rules governing trustees.

Although there may be public confusion whether living trusts are contestable, they are. An attorney can minimize the opportunities for trust contests, but it is impossible and illegal to place a blanket provision in your trust prohibiting future contests. You should avoid sales pitches by trust companies attempting to sell you their trust services if they falsely promise to make them “fool-proof.” If you purchased a service from these companies, make sure you talk to your attorney about the living trust document they sold you before returning them.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

There are many different reasons you may want to create a living trust, and your attorney may decide to supplement your will with a living trust. However, in most cases, a living trust does not replace the need for a will. Your attorney may decide that creating a living trust is essential to your overall estate planning needs.

A living trust does not have to go through probate, and your living trust is not a part of public record, as your will is. A living trust may be a good idea to help you address setting aside enough money for a child or incapacitated adult who is unable to take care of her own finances. You can give your trustee specific instructions for distributing money to a guardian to address those special concerns.

Your attorney may decide that a living trust is unnecessary to meet your estate planning goals because other instruments, such as payable on death accounts, may address them. After discussing your needs with your estate planning attorney, your attorney can discuss the benefits with you. You can contact our office today to discuss whether a living trust is appropriate for your individual estate planning needs. If you contact our office we can help you determine the costs and benefits of creating a living trust as part of your estate planning documents.

Check in with us tomorrow to read Part 3 of An Insider’s Guide to Living Trusts in New York.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

A living trust allows the person creating the trust to set aside money or property within the trust for the benefit of others by appointing a trustee to administer the trust and ensure the trust property is distributed to the beneficiaries. If you are the person creating a living trust, you are known as the grantor, owner or settlor of the living trust. A living trust is also known as a revocable inter vivos trust.

A testamentary trust, on the other hand, becomes operative after your death, pursuant to your will. Testamentary trusts typically go through probate. A living trust earns its name from the fact that you as the grantor of the trust created it while you were alive and it becomes effective before your death. After your death, your living trust may continue to operate as long as you comply with the New York Estates, Trusts and Powers Law when creating one.

Your attorney may also decide to create a “pour-over” will that allows any other property to pour-over into your trust after your death. However, the property that may pour-over from your will into your living trust will still have to go through probate. It typically becomes public record as soon as your personal representative or trustee submits it for probate. In this case, your living trust and your will become part of the New York Surrogate Court’s public records accessible by public request.

Check in with us tomorrow to read Part 2 of An Insider’s Guide to Living Trusts in New York.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

On average, it takes about 2 to 4 weeks to get the revocable living trust in place; then, it takes another few weeks to 6 months to get the trust fully funded.  This is a relaxed pace; if there is an emergency, such as a terminally ill client, the entire process can be sped up.

You and your family are protected the moment that you sign your living trust document.  It is effective immediately.  Funding takes longer.

Funding refers to the transfer of assets into your living trust or changing the beneficiary designation on life insurance, retirement accounts, and annuities.  This can take awhile because you need to send out letters of instruction and fill out forms.

It’s important that you don’t take it for granted that an asset is funded, unless you receive written confirmation that the change in title and/or beneficiary designation has been made.  Sometimes paperwork disappears.

Keep a list of all your assets, designating which assets have been funded.  Keep proof of your funding in the same file with all your important documents.

Proof would include a change of beneficiary statement listing current beneficiaries or a quarterly financial statement from an investment, showing the name of your trust, not your name and not joint names with a spouse.  You can likely look online to confirm funding of accounts.

Just keep a copy of your most recent statements.  It’s important that your loved ones know of all of your assets because there are $32.9 billion in unclaimed assets; don’t let yours be among those.

In addition, funding is essential to an estate plan that works.  Your trustee and trust only control those assets funded into your trust.  This is extremely important if you become incapacitated and when you die.

If you have questions about setting up and funding a revocable living trust, consult with a qualified estate planning attorney.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

Revocable living trusts are widely used and are now part on the everyday vernacular; however, if you don’t fully understand the advantages and disadvantages of setting up a revocable living trust, you are not alone.

In a nutshell, living trust advantages include:

• Control:  Using a trust permits you to stay in control during any period of disability and even after your death.  Otherwise, without a trust, the courts and state law take over and you lose control.
• Probate Avoidance:  A fully funded trust avoids probate, saving your family money, time, and hassle, and keeps everything private.
• Lower Overall Cost:  A fully funded trust lowers over-all costs by avoiding living probate (i.e. guardianship) and death probate.  A trust is often used to minimize or totally avoid the state and federal estate tax as well (for married couples.)
• Convenience:  Your loved ones avoid court interference, with increased convenience and reduced hassle.
• Confidentiality:  When probate is avoided, nothing is filed at the courthouse or in any other public forum.  Your business stays your business.

In a nutshell, the disadvantages of setting up a revocable living trust:

• Upfront Legal Fees:  The costs of setting up a living trust are more than the costs of a simple will; however, the overall lifetime and death settlement costs are much lower.
• Funding:  A perceived disadvantage to a living trust is that your assets have to be funded into your trust.  This takes filling out change in beneficiary forms, change in title forms, and filing real estate deeds.  However, funding only has to be done once and it’s a lot easier for you to do it than your loved ones. who don’t really know what you own.  They may miss assets or probate may take months or even years if you don’t have a fully funded trust.

If you’d like to discuss the advantages and disadvantages of a revocable living trust in your individual situation, consult with a qualified estate planning attorney.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

Yes, but no.  When you have a fully funded revocable living trust, your final asset distribution is in your trust; and, technically, if you have all of your assets funded and no minor children, you don’t need a will.  In this case, your trust is called a “will substitute.”

However, it is prudent to execute a pour-over-will, which is used to distribute any assets intentionally or inadvertently left outside your trust or any assets flowing into your estate at the time of your death, such as the repayment of debts or monies from a car accident or malpractice claim.

In addition, if you have minor children, the will, or the pour-over-will, is used to appoint guardians to raise and care for your minor children if you die.

If you die without a will, any assets not controlled by your trust or by beneficiary designation will be distributed pursuant to state intestacy laws and heirs, not of your choosing, may receive an inheritance.

In addition, if you die without a will and you have minor children, the court will decide who raises your children, not you.

The only beneficiary of your pour-over-will is your revocable living trust.  If needed, it picks up any assets not funded into your trust, and pours them into the trust.  This is done through the probate process.

It’s generally recommended that you fully fund your trust; this means that all of your assets are either titled in the name of your trust or their beneficiary designation has been changed to the name of your trust.

Because we discuss “trust funding” so often and stress titling all of your assets into the name of your trust, it’s easy assume that your trust owns the assets.  In truth, the trustee of your trust owns the assets.  While you are alive and well, the trustee is likely you so you maintain full control over your assets.

If you become incapacitated or die, your successor trustees own the trust assets and manage and distribute them for the benefit of your beneficiaries.

While, technically, some folks can go without a will if they have a fully funded revocable living trust and no minor children, it is not recommended.  Execute a new pour-over-will anytime you update your trust.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

You should own your property in accordance with your needs, goals, and up-to-date estate plan, designed by a qualified estate planning attorney.  Proper asset ownership is a key to a successful estate plan; and, most people don’t own their assets properly.  If you have a revocable living trust, fund your assets into the trust.

If you do trust-based planning, your estate planning attorney will tell you to fund all of your assets into the name of your trust.  This is the only way your trust will work and won’t be just a pretty pile of papers in your desk drawer.

How to Fund Your Trust

For example, you change the name on your bank accounts and investment accounts, to the name of your trust.

You transfer the title of your house to the name of the trust, and change the beneficiary of your life insurance policies, annuities, and retirement plans to the name of your trust.

Assets Your Trust WON’T Control

Your trust can only control assets in its own name; therefore, your trust does NOT control:

• Assets in your individual name
• Assets you own jointly with someone else
• Tenancy by the entireties assets
• Assets with a beneficiary designation, unless the title and beneficiary have been changed to the trust
• Assets with a “pay on death” or “transfer on death” designation
• Assets with a “in trust for” designation
• Assets in your spouse or children’s names

If you’ve done estate planning, specifically trust planning, make sure that your plan actually works by making sure you own your assets properly.   For guidance on your individual situation, consult with a qualified estate planning attorney.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

Most estate planning clients want to avoid court interference through guardianship proceedings once they learn what it entails.  A guardianship is a court proceeding during which your competency is questioned.  It is expensive, time consuming, public, and stressful.

If the court determines that you are incapacitated, it will appoint a guardian to take over your finances.  You have no control over who the court appoints and it may not be a family member.  It might be a local attorney.  Your assets will be eaten away by ongoing guardianship fees and court costs.

You can totally avoid guardianship proceedings, court interference, and losing control with a fully funded revocable living trust.

A trust is an agreement that you create; it’s really a set of instructions, explaining how you want your finances handled should you become incapacitated and when you die.

It’s imperative that you fund all of your assets into the trust and designate your trust as the beneficiary of your life insurance policies, retirement accounts, and annuities.

When you have a trust and have granted disability trustees authority to step into your shoes if you become incapacitated, court interference and the guardianship proceeding is avoided.

All assets that can be funded into the trust must be funded; the trust and your disability trustee only controls assets funded into the trust.  Be sure to execute an up-to-date power of attorney in addition to your trust to handle any assets that can’t be funded such as retirement investments and qualified annuities.

RED FLAG:  Never try to fund retirement accounts and qualified annuities because doing so will accelerate all the income tax due.

RED FLAG:  Your power of attorney must specifically say that your agent has the power to deal with life insurance policies, retirement accounts, and annuities.

If you would like to avoid court interference and guardianship, execute and fund a revocable living trust and a power of attorney with the assistance of a qualified estate planning attorney.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

Inheriting in a lifetime protected trust is the absolute best way to receive an inheritance.  And, you should keep your inheritance in your trust.  Why?  Good question.   And, we have good answers.  Read on.

When your inheritance is in trust, it’s protected. 

This means that it’s available for your use, and likely your children’s use, but no one else.  The trust will be drafted with protective language so that if you get sued in malpractice or stemming from a car accident, go bankrupt, experience business failure, or get divorced, the assets are protected.

If you have inherited outright, the assets could be seized by these creditors and others.

When your inheritance is in trust, you can more easily ward off predators.

When predators know that you’ve inherited, you are likely to get requests to invest, make a loan, make a gift, and donate to charity.  It can be overwhelming.  When your inheritance is in trust, you can more easily ward off predators.  For example, when an unscrupulous Cousin Vinny asks to borrow money, you can respond, “Sorry, Cousin Vinny, it’s all tied up in trust.”

Think of your inheritance as being held in a treasure chest.

When you inherit in trust, you inherit a treasure chest; and, you have the only key to the treasure chest; your creditors and predators have no access.  You can access the treasure to buy a house, car, food, and pay utilities and medical bills.  You can really access the treasure for any of your needs:  health, education, and maintenance.

Keep assets in your treasure chest.

As you make investments and, perhaps, purchase a home.  Keep the assets in the trust.  For example, when you purchase a home, purchase it in the name of your trust, not in your individual name or joint names with your spouse.  If the house in titled in the name of the trust, it cannot be taken from you.

If you have any questions about inheriting in trust or about running your trust, consult with a qualified estate planning attorney.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

If you’re thinking about the estate planning tools that you want to utilize, you’ll likely consider the use of a living trust or a living will.  It’s important to understand that these documents are very different and are used for different reasons.  While not everyone may choose to create a living trust, most people choose the use of a living will.  Take a look at the following information, to better understand these planning tools.  If you have any questions, or if you’d like to create a living trust or a living will, contact an estate planning attorney.

What are the benefits of a living trust?

A living trust is a planning tool that allows you to accomplish a number of things.  For one, it allows you to have full control over your assets during your lifetime, even during incapacity.  Second, if used correctly, it also allows the assets in your trust to avoid probate.  Third, you can include special needs planning, charitable planning, pet planning, legacy planning, asset protection planning, and bloodline protection planning in your trust.

Why would I want to use a living will?

A living will is an estate planning tool that allows you to make important end of life decisions ahead of time.  If you become incapacitated and are in an irreversible coma or a persistent vegetative state, this document is used to determine the medical treatment that will be permitted and that which will not.  Many people use this document to outline their wishes regarding the use of life support.  If you don’t want to remain hooked up on machines in order to live, then you want to create this planning document.

Make sure that you understand the differences between these important documents.  This will allow you to create a plan that fits in with your needs and goals.  If you have any questions, or if you’d like to create a living trust or a living will, consult with a qualified estate planning attorney.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.