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Setting Up a Trust

Rutkin & Wolf PLLC  June 13, 2024

The document is signed by a female lawyerIf you don’t have a trust yet, you should definitely consider setting one up. As one of the most flexible and powerful estate planning tools, a trust can help you keep your assets out of probate and reduce your estate’s tax liabilities, among other things.  

At first glance, setting up a trust may not seem all that complicated, but as you dig deeper, things may get slightly more confusing. Fortunately, you don’t have to create a trust on your own and can rely on our law firm for guidance.  

At Rutkin & Wolf PLLC, we know all about trust creation, execution, and administration. Our trusts attorneys in White Plains, New York, are attentive to your needs and can provide you with personalized trust solutions for your peace of mind. 

What Is a Trust? Why Do You Need One?  

Nearly everyone who knows a thing or two about estate planning is familiar with the concept of last will and testament (also known as a “will”). A will is a document that allows you to outline where and to whom you would like to transfer your assets after your death, appoint a personal representative, name guardians for your minor children, and do certain other things.  

A trust (also known as a living trust in New York), on the other hand, serves a different purpose. With this legal arrangement, you can ensure that your assets go to specific beneficiaries by putting those assets into a trust and appointing a trustee to manage and administer them for the designated beneficiaries. There are three main “players” when setting up a trust: 

  1. The trustor or grantor who creates the trust;  

  1. The trustee who administers the trust; and 

  1. The beneficiary who will ultimately benefit from the trust.  

If you think you have to choose between a will and a trust, you don’t. These two tools complement each other quite well and make up a well-rounded estate plan. But how do you know that you need a trust? People create trusts for various reasons, but some of the benefits of having a trust include: 

  • No probate: The assets held in a trust do not go through probate.  

  • Potential tax benefits: Assets in a trust may not be subject to estate taxes when set up properly.  

  • Specificity: You can customize how your assets will be dealt with currently and over time.  

  • Flexibility: If your trust is revocable, you can change its terms at any time.  

With a trust, you have complete freedom to dictate how and when your assets should be distributed to the beneficiary. For example, when creating a trust for children with substance abuse problems, you can limit the beneficiary’s access and control over the assets.  

The Step-by-Step Guide to Setting Up a Trust in New York 

Follow these five steps when creating a trust in the state of New York:  

  1. Choose your trust type: Trusts are generally divided into revocable and irrevocable trusts. A revocable trust can be modified and/or revoked by the trustor during their lifetime. With an irrevocable trust, on the other hand, the trustor has no control over trust assets. Each type of trust has its pros and cons. For example, irrevocable trusts come with tax savings and are generally out of reach from possible creditors. The same cannot be said about revocable trusts.  

  1. Consider which assets to place in a trust: Think about all the assets you have and decide which assets you want to put into your trust to avoid probate, minimize taxes, and get other benefits.  

  1. Select your trustee: As explained earlier, a trustee is responsible for managing and administering your trust assets for the beneficiaries. While you can name yourself as the trustee, you should also name a successor trustee to ensure that the trust works as intended when you pass away.  

  1. Create the actual document: Ideally, you might want to consider contacting an attorney to help you with this step. Your attorney will ensure that everything is set up correctly and according to the legal requirements. Do not use online templates to set up a trust, as those DIY tools offer one-size-fits-all solutions and cannot account for specific nuances of your estate and state.  

  1. Sign the document: In New York, a trust is considered valid if signed by both the trustor and trustee either in front of a notary or two disinterested adult witnesses.  

  1. Fund the trust: At this point, you should be ready to transfer your asset(s) into the trust. Your attorney will help you with the paperwork to make that happen.  

With the assistance of a trusts attorney, you can create a valid trust that reflects your wishes accurately and complies with the applicable state laws in New York.  

Set Up Your Trust Under the Guidance of an Attorney 

When considering a trust, you might want to get help from an attorney. Our attorneys at Rutkin & Wolf PLLC can help you safeguard your assets for the future and ensure the trust works exactly how you need it.  

Let us help you structure your trust in a way that provides maximized benefits and serves your intended purpose. With an office in White Plains, New York, we also provide estate planning services to clients in the surrounding area, including New Rochelle, the Bronx, and Lower Westchester County. Contact us today to schedule a free consultation.