Local residents usually take the time to craft a New York estate plan because they wish to prepare for disability, save estate taxes, and avoid the probate process. In most cases these goals are best met through the use of a living trust. The trend over the past several decades is for middle class families to craft trusts instead of wills for their inheritance planning. As our New York elder law estate planning attorney Bonnie Kraham explained in an article published this week in the Times Herald-Record, unlike wills, trusts are private documents that do not need to be filed with the Surrogate’s Court. No costly, stressful, time-consuming probate process needs to be undertaken upon one’s death when a trust is used.
Instead of court involvement, a trust is usually administered by a successor trustee. Upon the death of the original trustee (the individual who created the trust), the successor trustee must inform the beneficiaries of the situation, gather and invest the grantor’s assets, notify creditors, pay taxes, and distribute assets per the trust provisions.
Attorney Kraham notes that the trustee who administers the trust has a variety of other obligations. They must remain loyal to all beneficiaries, including the contingent beneficiaries–acting impartially between them at all times. Also, the trustee must ensure that trust property produces income. Therefore it is incumbent upon the trustee not to keep large amounts in non-interest bearing accounts or allow a home to sit vacant. At the same time, all investments must be prudent, and a sound overall investment strategy must be employed. This typically requires diversification which balances both income production and investment safety. Other trustee duties include the filing of tax returns, distribution of trust income, handling of expenses, and the maintenance of proper records.
For many individual trustees, the requirements of the role are quite complex and time-consuming. In addition, the emotion involved in the death of a loved one often results in the reappearance of family conflicts at the very time when an estate must be settled. It is often difficult for individual trustees who are relatives or close personal friends to prevent the turmoil from affecting the proper administration of the trust. That is why professional trustees are often chosen; they are trained in these matters and can ensure that everything is handled properly. Banks, lawyers, and trust companies often serve in this role. For decades our New York estate planning lawyers have helped many local families in this very capacity.
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