Simply put, a trust is an agreement that provides a trustee with the authority to take care of the assets within it until the beneficiary inherits them. In this scenario, the individual who creates a trust is known as a trustor. The person who receives the assets within the trust is known as a beneficiary. A third party exists as well to manage the trust on behalf of the beneficiary. This person is known as the trustee. Read on to learn more about trusts in New York and the process of modifying/terminating them.
Types of Trusts
There are a variety of different trusts you can create in New York. The most common trusts available include:
- Revocable Trust: This is a common choice for trustors, as it can be modified, changed, or terminated at any moment without the need for the beneficiary’s permission.
- Irrevocable Trust: This requires a trustor to give up their rights and access to the trust when it is created. This means they cannot change or terminate it at any time.
- Irrevocable Life Insurance Trust: This allows a trustor to remove their life insurance from the estate plan so the beneficiaries are free from any taxes that are placed on it.
- Charitable Trust: There are two types of charitable trusts. A charitable leads trust lets the individual’s choice of charity to receive interest from the financial gift for a period of time. When the period ends, the remaining assets may go to other beneficiaries. A charitable remainder trust allows charities to receive the assets in a trust at the end of its term. Until then, the donor receives interest on the gift.
- Special Needs Trust: This can be created for a loved one with a disability to make sure they receive the financial support they need throughout their life.
Can I Modify a Trust?
When it comes to modifying or terminating a trust you have created, it greatly depends on the trust. For example, a revocable trust can be changed or terminated, but an irrevocable trust cannot be. As a result, it is important to speak with an experienced estate planning attorney to ensure that you are creating the right trust for your situation.
If you have any questions or concerns about modifying or terminating a trust in New York, reach out to our experienced firm today.
Contact our Firm
If you or a loved one needs assistance creating an estate plan and wish to speak with an experienced attorney, contact the Law Office of Andres D. Gil, PLLC today.