Planning your estate

What are The Benefits of Establishing a Living Trust in New York?

When planning your estate there is a choice to be made between writing a will and creating a trust. While a will transfers assets to heirs at death, trusts operate differently. The grantor typically appoints themselves the trustee and retains control of the trust during the remainder of their life. Though living trusts have become popular, many people may not realize the general benefits of establishing a living trust.

Saving on Estate Taxes

For married couples with more than a $5.5 million dollar estate (the “cliff” in New York for wealthy estates where tax is paid on the entire estate), a living trust can be created for each spouse and allow the couple to pass $11 million state and federal tax free to their heirs rather than just $5.5 million. That’s a big difference in savings for your loved ones! A single person can pass $5.5 million in a living trust free of State estate taxes, as well.

Added Privacy by Avoiding Probate

Unlike a will, which goes through probate and becomes public record, a trust is not revealed to the public because it bypasses the public probate court. This means your assets, the trust specifics, and your beneficiaries remain private and your assets go directly to beneficiaries upon your death without distribution delay. Trusts are also more difficult to contest than a will, so there is less chance your trust will become public record due to the actions of a disgruntled heir attacking your estate plan.

Children from Earlier Marriages are Protected

You can specify under the terms of your living trust that both your children from a previous marriage as well as your surviving spouse can receive protection and fair treatment.

Guardianship Proceedings Will Be Avoided

In the event you are unable to manage your estate or become disabled, your living trust keeps you from needing a court-mandated guardianship for the assets in the trust. Whomever you have named as the successor trustee will seamlessly step in without government interference or unnecessary expense to manage your affairs.

You Can Control How Your Estate is Managed and Spent Even After Death

Your living trust can be structured to provide for the education, care, and support of children or grandchildren by designating an age when assets are turned over to them. You can even designate that life insurance proceeds be paid into the trust so the successor trustee can manage them for the benefit of your family members.

There are many upsides to establishing a trust as opposed to a traditional will. However, the most important thing is you have a plan for your estate to keep it from passing through probate. Our talented trust and estate attorneys at MOWK Law can help you make the best decision and come up with a plan that carries out your wishes and gives your estate maximum protection. Contact us today to learn more!

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What Happens If You Die Without a Will in New York?

When someone in New York dies without creating a will, protocols and laws exist that dictate what happens to their assets. Under the doctrine of intestate succession, a decedent’s assets that would have ordinarily passed through a will are then given to their closest living relatives.

Scope of Assets Affected by Intestate Succession

Usually, intestate succession only applies to assets owned by the decedent in their name alone. Also, many assets are not passed through a will and are unaffected by laws of intestacy, including:

  • Proceeds of a life insurance policy;
  • Payable-on-death bank accounts;
  • Property the decedent transferred into a living trust;
  • Funds held in a 401(k) or IRA;
  • Securities placed and held in a transfer-on-death account; and
  • Property the decedent owns with another in tenancy by the entirety or joint tenancy.

Whether or not the decedent has made a will, these assets will pass to their named beneficiary or to a property’s surviving co-owner.

Intestate Succession Recipients

In New York, assets are doled out based upon the surviving relatives a decedent has. Children, parents, siblings, and spouses are the most common recipients of assets through intestacy, but others may also inherit.

Some cases are straightforward – when a sole, close category of family exists. For example, when there are children but no spouse, the children inherit everything and vice versa. If the decedent has no spouse or descendants but surviving parents, then they inherit everything. If no spouse, descendants, or parents exists but the decedent had siblings, then they will receive all the intestate assets.

Spousal and Child Intestate Succession

In cases where the decedent has both a surviving spouse and descendants, the assets are split. The spousal share depends upon whether decedent has living descendants like children, grandchildren, or great grandchildren. If so, the spouse inherits the first $50,000 of the intestate property plus half the remaining balance while the rest is split among the descendants.

If the decedent has no will but has children, in New York they will receive an intestate share. The size of each child’s share is dependent upon the number of children decedent has and whether the decedent also has a spouse. To inherit, the children must also legally be considered children by the state of New York. Though for many people this is not at issue, confusion may arise when the decedent has:

  • Stepchildren;
  • Foster children;
  • Adopted children;
  • Children born out of marriage;
  • Posthumous children; and
  • Grandchildren.

Situations, where these individuals exist and are potentially posed to inherit, can become complex and tricky, so consulting an attorney experienced in New York estate law is advisable.

When a Decedent Has No Family

Dying with no will and without any family is a rare occurrence. This is because New York estate laws are designed to ensure a decedent’s property passes to anyone even remotely related to them, such as a:

  • Child;
  • Grandchild;
  • Spouse;
  • Sibling;
  • Niece or nephew;
  • Great niece or great nephew; or
  • Cousin.

If the decedent truly leaves no family members behind, all their property will be forfeit (or “escheat”) to New York State. This is one reason it is so important to understand estate law issues and ensure decisions are discussed with a New York estate attorney and decisions made to avoid this outcome.

New York Estate Planning Law Firm

At MOWK Law, we are here to help you will all your New York wills, trusts and other estate planning needs. The time to plan is now—get in touch with us today to start or revise your estate plan.