Trusts

Trusts Lawyer in Brooklyn

A living Trust is a complete will substitute that avoids Court /probate process. It is a written agreement and plan regarding who to control and manage your assets during LIFE and DEATH and or DISABILITY. Trustee may continue to buy and sell assets.

Benefits of a Living Trust

  • Your written plan happens automatically
  • No Court Delays or Interference
  • Can reduce or eliminate estate taxes in some instances
  • Can allow family to take advantage of the Medicaid spend down rules
  • Can provide care to children and future grandchildren in a way to prevent them from wasting such assets
  • Protects you while you are alive

Trusts Protects Beneficiaries

  • Protects incapacitated or disabled beneficiaries. No Guardianship needed
  • Can provide divorce protection for your heirs
  • Can protect your children’s inheritance if your spouse remarries
  • Can provide creditor protection for your heirs who have creditor problems
  • Can amend terms and beneficiaries, and relationships sometimes change

Easy to setup a Trust

  • An agreement between trustor and trustee(s)
  • Trustor
  • Trustee
  • Beneficiary
  • Fund Trust

Tax Advantages of a Trust

  • In New York State, an Estate over million dollars triggers an estate tax.
  • A married couple can pass on to their family by forming a living trust $2,000,000 tax free. Certain type of trusts such as a bypass trust or disclaimer trust can help to reduce or eliminate estate taxes.

New York Estate Tax Savings with a Bypass Trust

  • George and Weezie Jefferson are 69 years old and have a net worth of $2,000,000. George has a New York Condominium worth $ 1,000,000 in his name. Weezie has a stock account in the amount of $1,000,000.They would like to leave their assets to their son Lionel.

Assume George dies first in 2014 in New York

Without Planning

  • First Death (George) Second Death (Weezie)
  • Gross estate $1,000,000 $2,000,000
  • Marital deduction $1,000,000 $0
  • New York Taxable Estate $0 $2,000,000
  • New York Estate tax due $0 $99,600

With Bypass Trust Planning

  • George leaves $1,000,000 in a bypass trust to Weezie

With Bypass Trust Planning

  • First Death (George) Second Death (Weezie)
  • Gross Estate $1,000,000.00 $1,000,000.00
  • Marital Deduction $0 $0
  • NYS Taxable Estate $1,000,000 $1,000,000
  • New York Estate Tax Due: $ 0 $0
  • With Bypass trust planning, Lionel saved $99,600 (plus attorney fees, probate costs)

Irrevocable Trusts

  • An irrevocable Trust is a Trust that cannot be revised or altered.
  • A major use of the Irrevocable Trust is to protect you from the Medicaid down the road. If you designate someone who you trust as Trustee, such assets in your trust will not be considered yours when looked at by Medicaid.
  • Despite the advantages with respect to Medicaid, some people are not in favor of an irrevocable trust as one loses control of their assets. Situations and relationships sometimes change, and one would be stuck with this document forever.

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