A New York estate plan does not have to be complex to be effective. However, you may find it helpful to create one that contains more than just a basic will. While a will is an undeniably important component of your estate plan, you may be able to accomplish certain objectives you are unable to do with a will by also creating a trust.
According to Kiplinger, a trust is an estate planning option that involves you placing assets inside and then appointing a trustee responsible for overseeing the trust’s distributions. Many different types of trusts exist, and they do not all work in the same manner. However, you may want to think about forming a trust if you wish to do any of the following.
Protect assets from creditors
Placing assets into trusts safeguards them if someone files a lawsuit or wins a judgment against you. This is the case because when you enter assets into a trust, they become your trustee’s property, rather than your own. Because the assets in the trust are no longer your direct property, your creditors may not touch them.
Make distributions with conditions
If you are nervous about leaving assets to a particular beneficiary because he or she is irresponsible with money or struggling with some type of drug, alcohol or gambling dependency, a trust may meet your needs. With a trust, you have the option of dictating that certain beneficiaries receive their distributions only when certain circumstances come to be.
These are two key reasons many people include trusts in their estate plans. However, there are many other things you may be able to accomplish through a trust that you may not be able to do through a will.