Wills & Trusts Attorneys in Westchester County
Serving New York County, Putnam County & Dutchess County
Create a Plan for the Smooth Division and Distribution of your Estate Assets
Chances are you want to make sure the things you owned and enjoyed in life will get passed on to your loved ones when you pass away. We frequently believe that we have plenty of time to address these issues. However, we know that time flies quickly, and unexpected things happen. We have all experienced this. Be realistic and take care what is important to you so you can relax and be comforted in the knowledge that you took care of business. By taking the time to meet with our attorneys, you will be made aware of methods to save money during your lifetime, avoid unnecessary estate related expenses and ensure that your intentions are imposed on the distribution of your assets.
Real estate, investments, liquid assets, and personal property like family heirlooms are all important pieces of your wealth and legacy that you probably want to be sure will fall into the right hands. The best way to ensure this happens is by establishing a Last Will and Testament and/or Trust.
Corliss Law Group, P.C. helps clients with estate planning needs, such as: advanced directives (Power of Attorney, Health Care Proxy, Living Wills); Last Will and Testament; and Trusts for various purposes including asset protection for Medicaid and Veterans benefits, to reduce estate tax exposure and more . We enjoy advising clients to achieve their stated goals, which often include maximizing assets and protecting their loved ones’. Without such planning, your estate may incur expenses that could have been avoided, and your assets being distributed in ways you never intended. There are many options and variables to consider when planning for your family’s future, but our Wills and Trusts attorneys in Westchester County can help you develop a plan that makes the most sense for your wishes and loved ones.
What Are the Key Differences Between a Will & a Trust?
Everyone has heard the terms "Last Will and Testament” (a/k/a “Will”) and "Trust", but not everyone knows the differences between these two legal instruments and the consequences of utilizing each. They both direct the application and disposition of your assets and can contain the exact same complexity in dispositional schemes and tax planning. In certain instances, a Will can achieve a result that a Trust cannot and vice-versa. There are important differences between the two instruments, as explained below.
One major reason a Trust is chosen as the centerpiece of an estate over a Will is that, upon your death, there is no need for a Trustee to seek the permission of the Surrogate’s Court to handle your affairs and to transfer the assets to your beneficiaries. The Trustee simply assumes the office by signing a consent form, accepting responsibility, and gets to work- contacting brokers and bankers (as the case may be), paying your remaining bills and distributing your Trust Estate to your beneficiaries.
A Trust passes outside of probate, so a court does not get involved. A Living Trust generally saves time and money. The upfront legal fees incurred to establish the Trust are the primary costs incurred for the Living Trust. Whereas, upon your demise, a Will can cause your estate unknown expenses and delay in the distribution of your assets. Moreover, if you own real estate in more than one state, a Living Trust can prevent the necessity for multiple probate proceedings in each state that you own real property.
By contrast, a Will cannot be acted upon or administered until a proceeding is commenced and the Surrogate’s Court validates the Will and gives the Executor permission to act. This process requires that a Petition be filed, next of kin identified and located and then formally served with a citation noting a specific date to appear in Court if the next of kin wishes to raise objections to the Will. All of this costs the estate money; the process can be very costly, especially if there are objections filed.
Very rarely does a Living Trust involve a Court proceeding. Most routinely, the Trust is not even filed with the Court. It remains private and not open to public view. Whereas a Will becomes a public record upon filing it with the Court.
Nevertheless, Wills have their advantages. For example, a Will allows you to name a guardian for your minor children (if any) and to specify funeral arrangements, while a Trust does not. A Will is the only mechanism for a spouse to establish a Supplemental Needs Trust for their surviving spouse and thereby immediately upon their demise, protect the bulk of the decedent’s assets from the medical expenses of the surviving spouse. A Trust can protect assets from medical expenses as well, but it must have been established five years prior to an event causing prolonged or permanent institutionalization.
One main difference between a Will and a Living Trust is that a Will only goes into effect after you die upon Court approval, while a Living Trust takes effect as soon as you create it.
A Living Trust is effective from the date that you as the Settlor (a.k.a. Grantor) and your Trustee both execute the Trust. A Trust established while you are “living” is called a “Living Trust”. A Living Trust should not be confused with a “Testamentary Trust,” which is a Trust established after you die is called a. A Testamentary Trusts is set up to address particular beneficiaries’ needs as opposed to an outright gift of property (for example, a Testamentary Trust might be established for a disabled person to preserve their government benefits or a minor child, among many other reasons).
A Living Trust can be helpful during your lifetime in the event of your incapacity. Your Successor Trustee or Co-Trustee may step in and help manage assets and pay bills for you.
A Will has no legal effect during your lifetime. Only the very last Will that you execute, prior to your death, is considered your actual “Last Will and Testament” that becomes irrevocably binding on your estate (assuming it is determined to be valid by the Surrogate’s Court).
A Living Trust is a contract between you as “Grantor” and your appointed “Trustee”. You agree to fund the Trust, and your Trustee promises to abide by the terms of the Trust. The mutual promises made induce each to act, resulting in a binding contract. A Trust must be notarized.
Your Will is not a contract. You are the only party to your Will, and your signature is witnessed by two witnesses (NY requires two witnesses, whereas some states requires three). You merely nominate an Executor to act once you die. The Court must approve of and empower your nominated Executor whereas your Trustee of your Living Trust need not be empowered by the Court- you empower him or her by naming the Trustee.
Your Executor does not sign a pledge to you that he or she will carry out your wishes once you die. However, in preparing the Probate Petition (application) to the Court, the Executor does sign an oath swearing to discharge honestly and faithfully his or her duties.
A Trust settled during your lifetime will dictate the application and disposition of your Trust Fund (a.k.a. Trust Estate) during your lifetime and beyond (in some cases briefly, in others for many years).
A Last Will and Testament is a vehicle to finalize and bring to an orderly conclusion the affairs of a decedent. The Court requires that the probate proceedings remain open a full seven months after it empowers the Executor to act so that creditors have an opportunity to be informed of the death and to file a claim against the probate estate to collect what is due and owing.
The Trust affairs can be concluded at the Trustee’s own pace, unless the Trust Instrument dictates otherwise.
Trustee vs. Executor
Both Trustees and Executors are “fiduciaries”. A Fiduciary is an individual who holds one’s property for the benefit of another; a fiduciary is held to the highest standards of honesty, integrity and must treat all beneficiaries fairly.
The Trustee holds legal title to property for the beneficiaries. The level of discretion a Trustee possesses, to administer and dispose of Trust funds, is determined by the Grantor of the Trust, and written into the document.
The Executor’s duties and extent of discretion is a matter of law generally. The Executor must be officially empowered by the Court, through the issuance of Letters Testamentary. As previously stated, your chosen Trustee (of a Living Trust) need not be empowered by the Court to act.
Wills and Trusts direct how your assets are to be distributed and to whom- but the assets that are governed by your Executor (pursuant to a Will) and the assets that are governed by a Trustee (pursuant to a Trust) are not the same. The two do not intersect.
In the case of a Will, the Executor is in charge only of those assets that you die owning in your name alone, without a joint owner and without an assigned beneficiary. Thus, assets held solely by a decedent - without a joint owner or where the bank or brokerage firm has no form on file stating who is to receive the funds upon your demise, are the Executor’s responsibility to marshal, administer and distribute. The Trustee has no power over these assets. The only assets the Trustee governs are those assets that are transferred into the name of the Trust.
Wills and Trusts Can Operate Together
Both Wills and Trust can be useful estate planning tools, depending on the needs and circumstances of the client. When they operate together, most often the Trust is the primary planning instrument and the Will merely acts secondarily, as a safety mechanism to unite an asset with a beneficiary when no beneficiary has been stated. In that case, the Will would simply state that any assets that you have failed to have a beneficiary assigned by virtue a joint account or other transfer on death mechanism (designated beneficiary or Transfer on Death, a.k.a. “TOD”), shall be included in your Trust and disposed of as your Trust directs. That type of a Will is commonly referred to as a “Pour-Over Will”.
If a Will were to stand alone (without a Trust), it would be a wordy document, specifying your beneficiaries, the method of receipt and the timing of the inheritance. If a Last Will and Testament were the only instrument utilized to distribute your property upon your demise, then a probate proceeding would ensue at your death.
The choice of which instrument to employ as the centerpiece of an estate plan should be made after carefully exploring the implications of each. This memorandum is provided for your edification and not to substitute for a legal consultation and customized discussion of your needs and which plan is best for you. Please contact our office to make an appointment to discuss your particular circumstances and estate plan.
If you need help with building the cornerstone of your estate plan – be it a Will or Trust – reach out to an attorney from Corliss Law Group, P.C. Our Wills, Trusts and Estates lawyers in Westchester are dedicated to helping people feel confident that their families will benefit from as much of what they leave behind as possible. If making sure your loved ones are financially secure, inherit a family property, or family heirlooms is important to you, reach out to Corliss Law Group, P.C. for help.
“The Corliss Law Group returned calls promptly and answered all of our questions.”- Karen C.