Creating a living trust can be a beneficial yet complex part of the estate planning process, often requiring the assistance of an experienced lawyer. Here is some helpful information about the importance of a living trust.
Importance of a Living Trust | What is a Living Trust?
An inter vivos trust (living trust) is created for holding ownership of your assets during your lifetime for the benefit of named beneficiaries and distributing those assets after your death. It may be revocable or irrevocable.
The grantor is the person who creates the trust. The grantor will name an individual to serve as a successor trustee to follow the terms of the trust after the grantor dies. When the grantor is living, they can serve as a trustee and control the assets even though they belong to the trust.
Importance of a Living Trust | Funding a Trust in New York
In order for a living trust to go into effect, the title to the grantor’s assets must be transferred into the trust. This means that titles to bank accounts, stock certificates or real estate owned by the grantor must be transferred into the trust. Just because you created a trust doesn’t mean the trust has become funded.
A deed is required to transfer real estate into a trust. Merely reciting in the trust agreement that assets are being assigned to or are held by the trust is insufficient for transferring them to the trust. Therefore, the NY Appellate Division, First Department ruled that the house is part of the probate estate, rather than part of the trust.
Importance of a Living Trust | Benefits
There is a cost to a living trust, and it has to irrevocably protect you from Medicaid. A revocable trust will not protect your assets from Medicaid. If you have all your assets in the trust or otherwise have beneficiaries on it, you could completely avoid the probate process. This is a very complex area as far as your estate planning, but it’s certainly something to think about as far as preserving your assets.
If you any questions about living trusts, please contact our experienced Rochester Living Trust Lawyers today so we can help you navigate this complex process.
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