There are good reasons why a person would choose a trust over a will. Here is a list of some of them.
Qualify for Medicaid – There are several types of trust that can help some individuals qualify for Medicaid, including home care and nursing home coverage. Learn more about Medicaid trusts.
Protection from creditors and lawsuits. A properly executed and funded irrevocable trust will shield the principal of the trust from creditors and lawsuits.
Avoid Probate – Probate proceedings can become expensive and delayed. Property that you will transfer to a trust will not have to go through probate.
Protection from your children’s spouses and creditors. You may not want any of your hard-earned assets to go to your child’s spouse, whether in divorce or as an inheritance. You do not want any of the assets you give to your child to go to your child’s creditors, whether as a result of a lawsuit or in bankruptcy.
Maintain Privacy – Proceedings in probate court are public record. Any person or organization will be able to find out the extent and location of your assets. Not so with trusts.
Avoid Multiple-State Probate Proceedings – If you have property in multiple states, you can avoid ancillary probate proceedings by transferring your property into a trust. Upon your death, the property will pass according to the trust and multi-state Surrogate’s Court proceedings will not be required.
Protection from irresponsible beneficiaries. A trust provides limits on how your beneficiaries can spend the assets. For example, you can specify amounts upon reaching a specified age.
Avoid Interruption of Income and Use of Assets – A trust provides for the continuity of management of your assets, and avoids interruption of income and use of assets upon your death or disability. Without a trust, your estate or business may be subject to restrictions imposed by the probate court.
Provide Planning for Mental Disability – A trust lets you select a trustee – someone you trust to manage your estate on your behalf in the event you become unable to do so yourself. Read more in Planning for Disability.
Save Money on Estate Taxes – Trusts can help you legally save a substantial amount on estate taxes. Read How to Avoid Estate Taxes to learn more about the credit shelter trust the life insurance trust. A “QTIP” trust or a QDT trust for the benefit of your spouse can further your tax savings goals.
A Charitable Remainder Trust (CRT) or a Charitable Lead Trust (CLT) will help you maximize your tax advantage per charitable dollar. A Grantor Retained Annuity Trusts (GRAT), an Intentionally Defective Grantor Trusts (IDGT), or a Unitrust are advanced trusts that remove appreciation of your property from your estate. Read more in Advanced Estate Planning.
Call the Law Offices of Albert Goodwin at (212) 233-1233 and make an appointment to discuss your estate planning needs.