Wills & Trusts

Wills and Trusts are the two most common documents used to accomplish a client’s estate planning.

Wills

A Last Will and Testament, commonly referred to as a “Will” specifies how your property and assets will be distributed at the end of your life, and who will receive them. A Will also allows you to name a trusted person to act as your personal representative, or executor, who will be responsible for carrying out your instructions. For a Will to be effective, it must be submitted for probate in your local County Surrogate’s Court.  Wills and Trusts are not mutually exclusive.  For example, you can potentially have a Trust set up in your Will to hold and manage assets for your minor children.  For further information on Wills, please see the “Questions and Answers about Wills” below.

Trusts

As an alternative to a Will as your primary estate planning document, you can establish a Trust during your lifetime. A properly drafted lifetime Trust can be part of an overall estate planning strategy to avoid the necessity of probating a Will. Such a Trust will take title to your property, while allowing you to continue managing your assets during your lifetime. It also allows you to name an individual to manage your affairs in the event of your incapacity as well as to settle your estate when you die. In addition, a Trust is a private document (unlike a Will) that does not get filed in the local County Surrogate’s Court.  For further information on Trusts, please see the “Questions and Answers about Trusts” below.

Questions and Answers About Wills

What happens if I do not have a Will?

If you do not have a Will, the New York laws of descent and distribution determine who will be left your property, unless you have directed that it be distributed by Trust or by other non-probate means.  The New York Laws of descent and distribution may leave your property to family members who you may not want to benefit from your estate.  Having a Will puts you in charge and allows you to determine who receives what from your estate.

Can I choose a Guardian for my children in my Will?

Yes.  In fact, if you have minor children, it is very important that you have a Will so you can provide who will act as Guardian if you are not around to take care of your children.  Having a Will also allows you to set up a Trust for their education and other important needs.

How does a Will become valid?

A Will must be signed before two witnesses and you must declare the document as your Will before those witnesses.  After you request them to do so, the witnesses must also sign the Will.  It is highly recommended that a qualified attorney supervise the signing of your Will to ensure it is done properly and the Will is therefore valid.

Do I need to keep my Will in a safe?

At O’Connell and Aronowitz, once your Will is signed, we keep the original in our Will safe.  You will receive a copy of your Will, which is marked with the location of the original.

What does the Executor do?

The Executor sees to the administration of your estate, by hiring an attorney to seek the probate of your Will in Surrogate’s Court.  Once the Court grants the Executor authority, he or she can work with the estate attorney to ensure your wishes are fully carried out.

Can I change my Will?

Yes.  As with the original signing of your Will, it is highly recommended that you work with a qualified attorney to ensure the modification of your Will is properly done and therefore valid.

Questions and Answers about Trusts

Are there different types of Trusts?

Trusts come in many different forms and serve multiple different purposes.  Whether a trust is right for you depends on your particular circumstances.  Here are some examples of different types of trusts.

What is a Revocable Trust?

A Revocable Trust holds property for you during your lifetime.  You can revoke the trust and take back ownership of the property at any time that you choose.  Revocable Trusts are sometimes used in the place of Wills in order to avoid the probate process.

What is an Irrevocable Trust?

An Irrevocable Trust cannot be revoked by the creator, but it allows the creator to have certain rights to the property transferred into the Trust.  For example, an individual can transfer her house to an Irrevocable Trust and retain the right to reside there as long as she lives.  Since the Trust is irrevocable, however, she cannot later reacquire the house, sell it, and keep the profits.  Irrevocable Trusts are often used in Medicaid planning because anything transferred into an Irrevocable Trust five years before a Medicaid application is not counted as a resource of the Medicaid applicant.

What is a Special Needs Trust?

Special Needs Trusts (SNTs) come in two different types:  a First Party SNT and a third party SNT.  A Third Party SNT can be set up for the benefit of a disabled person by a third party.  For example, a father may set one up for his disabled child in his Will, so that money will be available for the child’s care after the father’s death.  A Third Party SNT does not affect the eligibility of the disabled child for governmental benefits, such as SSI or Medicaid.  One of the advantages of the Third Party SNT is that the principal of the trust can be left to other family members after the disabled person passes away.

A First Party SNT is similar to a third party SNT in that it does not affect the eligibility of a disabled beneficiary for governmental benefits.  In contrast to a Third Party SNT, a First Party SNT is set up with the disabled person’s own funds – sometimes from the proceeds of their personal injury settlement.  In addition, funds left in the trust after the disabled person’s death must be used to pay off any lien Medicaid has for providing medical care during the disabled person’s lifetime.

Wills, Trusts, and Estate Planning in General

Whether a Will or Trust, or a combination of both, is right for you is something you should discuss with an experienced estate planning attorney.  Our estate planning attorneys are well versed in the use of Wills and Trusts and offer a compassionate, knowledgeable and superior level of personal service.  If you need advice about estate planning, please call O’Connell and Aronowitz today at (518) 462-5601.