Estate Planning Lawyer
Frequently Asked Questions
What is a Difference between a Will and a Trust?
This is the most common question asked. Many individuals are under the false impression that their will alone is sufficient to pass your estate to your beneficiaries without going through any court proceedings, called "probate". Unfortunately, a will is simply an expression of your wishes and must go through some kind of court process before the assets can be distributed to the heirs. The reason that a probate is needed is that the owner of the property or asset is deceased. Once the owner of the asset has died, probate court is the legal process needed to take their name off the title of an asset and put it in the new owner's name.
In plain language, a will speaks at the date of death and disposes of the decedent's estate at such time. A trust, on the other hand, speaks at the time of its creation and allows the settlor (creator of the trust) to provide how his or her property is used after the trust is created and even after the death of the settlor.
Will - What is a Will and Why does it need to go through Probate?
A will is a written document that takes effect after the death of the person signing it (the "testator"). Will is the document that does not work during testator's life. It only works after it has been "probated" - approved by the Surrogates Court. A new survey found that: an average person changes his will at least 4 times during his life. More than 33% of wills are thrown out of court as not prepared or executed correctly.
The Probate Process is a long one and is also costly. The Wall Street Journal estimated a cost of Probate Proceedings to be anywhere from 4-6% of the entire estate that goes through probate. The lenght of probate varies from state to state, but in NY, it will take up to 12 months to Probate a Will.
Trusts - What is a Trust and why do you need it if you have a Will?
A Trust is a form of property ownership where the legal and equitable interest are split so that legal title of the property is held by the Trustee and the beneficial interest and remainder interest are owned by one or more others, whose rights are controlled by the terms of the Trust document. Trust can own and administer assets, such as real estate, bank accounts, life insurance and others.
Unlike a Will, Trust does not need to go through Probate and is valid the minute it is created and executed by Donors and Trustees. Transferring property to a trust can help family avoid the messy probate process. The key is to transfer all your possessions to a revocable or irrevocable trust before you die. Assets in the trust will then be distributed according to your instructions. In most cases, a trust is more flexible than a will in that it can be set up to provide for children of many ages. A trust can also take into account which child needs more resources and provide for them. Wills generally tend to split property evenly among the beneficiaries. This may lead to lengthy probate contest hearings.
For more detailed explanation about Trusts, please call (718) 333-2395 and schedule an individual Trust and Estate consultation.
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