Jodi B. Zimmerman, Esq.
Sichenzia Ross Ference Kesner LLP
There are three basic ways for your assets to be transferred on your death:
- The Last Will & Testament which is the common method;
- The Revocable Trust (also referred to as a “living trust”) which offers some advantages over a Will; and
- Beneficiary designations, for assets such as life insurance and IRAs.
Let’s look at some of the basics of having a Last Will & Testament:
ü Last Will & Testaments usually have lower upfront drafting costs, however can be costly to Probate
ü Probate is a court-supervised process to protect the rights of creditors and beneficiaries and to ensure the orderly and timely transfer of assets.
ü Probate is time-consuming and public.
How does a Revocable Trust work?
ü A revocable trust typically avoids Probate and is private.
ü Revocable Trust acts as a Will substitute, although you’ll still need to have a short Will, referred to as a “pour over” Will (I call this the oopsie daisy Will).
ü You transfer assets into a trust for your own benefit during your lifetime.
ü You can serve as trustee or select some other individual to serve.
ü If you choose to be the trustee, the successor trustee you name will take over as trustee upon your death or incapacity, serving in a role similar to that of an executor.
ü In NY you’ll avoid probate if all of your assets are in the living trust when you die, or if any assets not in the trust are held in a manner that allows them to pass automatically by operation of law (for example, a joint bank account).
ü The pour over Will can specify how assets you didn’t transfer to your revocable trust during your life will be transferred at death.
Important: make sure the executor or trustee is willing to serve. The job isn’t easy, and not everyone will want or accept the responsibility. Provide for an alternate in case your first choice is unable or unwilling to perform when the time comes.