Wills vs. Trusts: Which Is Right for You in New York?
People who are old enough to have gotten started on their estate plans are outspoken about how little they understand generative artificial intelligence, but even we old folks understand that Chat GPT and its imitators do not think; rather, they only remix what humans said in the human-written web content that chatbots use as their source material. When it comes to answering questions about wills and trusts, the chatbots seemed to have learned their shtick from the days of aspirational web content. The chatbots make it sound like you are so wealthy that the tax obligations alone on the wealth you pass down to your next of kin will reach the six figures. Most of the time, wills serve more mundane purposes. They can even be a vehicle for your vindictiveness toward your own family or toward the beneficiaries of publicly funded programs. To find out more about writing a will or establishing a trust that matches your reality, contact a Bronx estate planning lawyer.
Generous People Need a Will, and So Do Misers
The main purpose of your will is to stop the probate court from distributing the property of your estate according to New York’s laws of intestate succession. If you do not write a will, then creditors and the IRS get first pick of your estate, and whatever is left goes to your closest surviving relatives. If you write a will, creditors and the IRS still get first dibs, but you get to choose who inherits what is left when they take their share. The beneficiaries of your will can be anyone you choose, including but not limited to family members, friends, and charities. Be as specific as possible about the identities of the beneficiaries, including their names, ages, and places of residence. If you wish to disinherit a close family member, you should specifically mention this in your will.
Choosing the Right Trust to Suit Your Purposes
Creditors and tax collectors can only collect money from your estate, but your best defense against this is to transfer property to non-probate assets such as trusts. A trust is a legal entity separate from the grantor, the person who created it; it functions like transferring assets to a company, except that the trust’s main purpose is to dispense money instead of earning it.
Some people establish trusts simply so their family members can receive their inheritance in installments instead of getting a lump sum when the estate settles. Even better, they can start paying the inheritance to the beneficiaries while the grantor is still alive. In other cases, you might establish a trust to protect a specific asset, such as your house, from creditor claims, especially if you plan to eventually enter a nursing home as a Medicaid beneficiary.
Schedule a Confidential Consultation With a Bronx Estate Planning Attorney
An estate planning lawyer can help you start your estate plan by drafting and formalizing a will and deciding whether to establish a trust. Contact Cavallo & Cavallo in the Bronx, New York to set up a consultation.
Source:
codes.findlaw.com/ny/estates-powers-and-trusts-law/ept-sect-5-1-1-a.html