New York Trust Lawyer

Types of Trusts in New York

Some of the common types of trusts include:

• Testamentary Trust – A testamentary trust is created as a part of a grantor’s estate plan and goes into effect upon their death. A testamentary trust can hold financial assets or personal property, real estate, personal papers, and other valuable holdings. A testamentary trust must comply with New York estate planning requirements and be approved by the court.
• Spendthrift Trust – A spendthrift trust limits the amount of money that the beneficiary receives and protects it from most of the beneficiary’s creditors.
• Living Trust – A living trust goes into effect as soon as the trust document is signed during the grantor’s life. Living trusts can be revocable or irrevocable.
• Revocable Trust – A revocable trust can be changed or ended by the trustee without the beneficiary’s permission.
• Irrevocable Trust – An irrevocable trust cannot be modified or dissolved after creation, however, in certain circumstances there may be exceptions to this rule. It is often used to transfer assets out of an estate and to the beneficiary, thereby avoiding estate taxes and probate.
• Charitable Trusts – A charitable trust allows the grantor to benefit either a specific charity or a charitable purpose without the formalities otherwise necessary to set up a non-profit corporation to serve the same purpose.
• Irrevocable Life Insurance Trust – Placing ownership of a life insurance policy in an irrevocable trust exempts the value of the policy from the grantor’s taxable estate. Upon death, the proceeds are payable to the trust and distributed to the trust beneficiaries without estate tax.
• Supplemental Needs Trust – An “SNT” can provide a beneficiary with discretionary funds that will not jeopardize governmental benefits. It can be created as part of the estate plan or as a separate trust that operates during the grantor’s lifetime.
• Beneficiary Controlled Trusts – A “BCT” can help ensure that the assets you’ve accumulated over a lifetime are protected and passed down through the bloodline.

Trusts can serve so many purposes for the individuals and entities that create them. Your trust lawyer can help you determine whether and what type of trust is the most appropriate for your circumstances and goals.