Understanding the Differences Between Wills and Revocable Living Trusts in New York

Estate Planning: Choosing Between a Will and a Trust

Estate planning is a crucial step in ensuring that your assets are distributed according to your wishes after you pass away. In New York State, two common tools for estate planning are wills and revocable living trusts. Understanding the differences between these two options is essential for making an informed decision that best suits your needs.

The Basics of a Will

A will is a legal document that outlines how you want your assets distributed after your death. It allows you to name beneficiaries, designate guardians for minor children, and appoint an executor to manage your estate. In New York, wills must go through probate, a court-supervised process to authenticate the document and oversee the distribution of assets. Probate can be time-consuming, and court fees can diminish the estate's value.

Understanding Revocable Living Trusts

A revocable living trust is a legal entity that holds assets on behalf of a person. The individual creating the trust, known as the grantor, can manage the assets during their lifetime and make changes to the trust as needed. Upon their death, the assets are transferred to beneficiaries without the need for probate. This can save time and cost, and provides privacy since the trust terms aren't public like a will’s probate records.

Key Differences

• Probate Process: Wills require probate, which can delay asset distribution. Trusts avoid this process (as long as the trust is properly funded), allowing for a more expedient transfer of assets.

• Privacy: Trusts offer greater privacy as they aren’t subject to public probate records, unlike wills.

• Control: Trusts allow for more ongoing control of assets after death.

• Costs: While establishing a trust can be more expensive upfront, it may save costs in the long run by avoiding probate fees.

Which is Right for You?

Deciding between a will and a revocable living trust depends on various factors including the complexity of the estate, privacy concerns, and your family’s needs. Consulting with an estate planning attorney can provide guidance tailored to your specific circumstances, ensuring that the plan you choose best achieves your goals in asset management and distribution.

Understanding these differences can help anyone planning their estate in New York make a more informed choice. Whether you choose a will or a trust, it's important to have a plan that reflects your wishes and eases the transition for your loved ones.