Which Type Of New York Trust Is Best For My Estate?
There are many different potential estate planning documents that a person can use to put their affairs in order. One of the most commonly used is the trust, which is a legal entity designed to hold assets ‘in trust’ for a future beneficiary or beneficiaries. However, what the average person may not know is that there are several different types of New York trusts, many of which may suit an estate planner’s purposes. Consulting an experienced attorney can help you determine which trust – if any – is right for you.
Trusts Offer Advantages
People choose to incorporate trusts into their New York estate planning because of the many advantages they can provide. One of the most commonly cited is that assets in a trust will generally not be subject to the probate process, which means that they can be transferred more quickly to a beneficiary. Trusts also offer tax benefits if structured in the appropriate way, which can save beneficiaries time and trouble in the long run.
In general, trusts may be revocable or irrevocable, general or specialized. One may also see a “living” trust, which is essentially the same as a ‘revocable’ trust. A revocable trust may be altered during the life of the settlor (the person who creates the trust), while an irrevocable trust is set in stone at the moment of its creation. Both have their advantages, but more people choose revocable trusts simply because they are flexible – and private (most trusts are not public record, unlike other estate planning documents such as wills).
Specialized Trusts For Special Situations
Two other types of trusts are commonly included in estate planning in New York. The “special needs” or supplemental needs trust (SNT) is a trust designed explicitly for the benefit of a disabled beneficiary. It is unfortunately common for a well-meaning relative to want to make a gift to a disabled family member – but they do not realize that too large a gift may lead to that disabled person’s losing any federal benefits they might have, such as Social Security Disability Insurance or Supplemental Security Income (SSDI or SSI). An SNT will help avoid that outcome.
Another more specialized trust seen often in New York estates is the Medicaid asset protection trust (MAPT). A MAPT is used when one or both spouses in a marriage are applying for Medicaid long-term care coverage – Medicaid is means-tested, and a MAPT can help preserve marital assets while still giving the best chance to qualify for the program. Some assets may not be placed in a MAPT, but many can that would otherwise have to be sold or “spent down” in order to afford care.
Contact A Westchester County Estate Planning Attorney
Planning one’s estate can be a complex endeavor, but with the right knowledge and help, it can – hopefully – be accomplished in exactly the way you wish. A Westchester County estate planning attorney from Meyer & Spencer, PC can help answer any questions you may have about the process. Call our office today to schedule a consultation.
Source:
nyc.gov/site/hra/help/supplemental-needs-trust.page
