How to Avoid Probate in New York State | Pierro, Connor & Strauss

To avoid probate, assets can be placed in a revocable or irrevocable trust. Since any assets in the trust are not subject to probate, this lengthy, expensive, and public process is avoided. Virtually any asset can be placed in a trust, including your residence, cash, real estate and investment accounts, and life insurance with cash value. The exception are retirement accounts such as IRA, 401(k), 403(b), etc. which do not need to be protected in trust. The assets transferred into your trust are not part of the estate since they are titled in the trust’s name. Fortunately, trust planning in New York offers this opportunity to avoid probate for your beneficiaries, saving time, legal fees and the frustration of going to court.

A New York estate planning attorney at Pierro, Connor & Strauss can structure a living trust to help your heirs avoid the probate process after your death and keep financial affairs private.

With our combined experience and years of assisting people to plan their future, we have many practice areas that allow us to provide a wide range of legal services dedicated to you and your loved ones.

What is Probate and Why Do You Want to Avoid It?

Probate is the process of proving a Will “to the satisfaction of the Court to be the valid Last Will and Testament of the decedent.”

It is probated in the Surrogate’s Court in the New York county in which the deceased resided. The executor named in the Will files the petition for probate. All beneficiaries and heirs require notice about the probate filing.

After reviewing the petition and Will, as well as any related documents, the court determines whether the requirements for probate are met. If so, the probate process goes forward.

If the decedent dies without a Will, the court appoints an estate administrator. An estate administrator or an executor is tasked with taking control of an estate to settle a deceased person’s affairs and distribute assets. They must notify all beneficiaries that probate has commenced. Estate assets must pay for the deceased’s taxes and debts. Only then will the remaining assets be distributed to beneficiaries.

How Long Does Probate Take?

Probate usually takes multiple months, although it can take years if anyone contests it. In the meantime, your beneficiaries – which may include family members, friends, and charities – must wait to receive the assets bequeathed to them. In addition, the costs of probate, including legal fees, are considerable. Your estate spends money on the probate process that could have gone to your beneficiaries.

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What is a Living Trust?

A living trust, also known as a revocable trust, allows you to transfer ownership of your assets during your lifetime. It requires re-titling of assets so that, for example, John Smith’s bank account is now titled “in trust for John Smith.” If your house goes into the trust, the deed requires re-titling.

As the creator or grantor of the trust, you can designate yourself as the trustee and manage the assets much as you did when they were titled in your name. You also name heirs and beneficiaries. If one of your heirs is a spendthrift, you can stipulate that they do not receive their share of trust assets until reaching a certain age.

A Successor Trustee Is Named to Manage the Trust

A successor trustee is named to manage the trust when you die. This trustee takes control of the trust and is charged with distributing assets to beneficiaries per the trust’s terms. Heirs and beneficiaries can receive their share of assets relatively quickly. If there are stipulations for heirs, the trustee manages it until the appropriate time. In contrast without a trust, assets can be frozen in limbo during the probate process.

Living Trusts Are Either Revocable or Irrevocable

With a revocable trust, you can revoke or change your trust at any point in your lifetime if you’re deemed competent. They provide flexibility and are a popular planning option for asset management, privacy and probate avoidance but do not protect assets from Medicaid when long-term care needs arise.

Irrevocable trusts are generally created to minimize estate taxes or protect the assets from creditors and the costs of long-term care. However, once assets are placed in the trust, you can use income from the trust but will need the consent of beneficiaries to transfer assets out for your benefit. If the trust is properly drafted, language can be included to give you considerable powers – allowing you to fire the trustee and change beneficiaries if they aren’t acting in your best interests.

Living trusts are also private. Your assets, creditors, and beneficiaries remain out of the public purview after your death.

How Does a Living Trust Avoid Probate?

Since any assets in the trust are not subject to probate, the process is avoided. Virtually any asset can be placed into a living trust, from your residence or other real estate to cars, art, antiques, jewelry, and bank and investment accounts. The assets in trust are not part of the estate since they are titled in the trust’s name.

Other Ways to Avoid Probate

Besides a living trust, there are other ways to avoid the probate process in New York. Certain assets, like life insurance policies with beneficiaries properly named, do not pass through probate. The same holds for retirement accounts such as IRAs and 401(k)s, which require designated beneficiaries.

Assets held jointly, such as bank accounts or real estate held jointly with the right of survivorship, are passed to the surviving owner. With a Transfer on Death (TOD) designation, you can leave your investment accounts to a specific beneficiary when you die and avoid probate. A similar designation called Payable on Death (POD) applies to bank accounts. However, New York does not permit TOD deeds for real estate or TOD registration for vehicles.

These are just a few examples of other methods of avoiding probate. A New York estate planning lawyer can advise you on the best strategy.

Contact Pierro, Connor & Strauss, LLC

For more information about creating a living trust or irrevocable trust to avoid probate and other estate planning needs, schedule a consultation with a New York estate planning attorney at Pierro, Connor & Strauss, LLC today.

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How to Avoid Probate in New York