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Maroney Law Blog

Tuesday, July 15, 2014

What is a Revocable Living Trust?

An Alternative to a Will
The revocable living trust is often considered to be a sound alternative to a traditional will. The advantage of a revocable living trust, as opposed to a traditional will, is that the lengthy probate process can be avoided. Additionally, the cost of administration can be substantially lowered while the distribution of your estate can be completed much sooner. Simply put, the distribution of your items will happen much quicker.

Understanding the Probate Process
The difference between a revocable living trust and a will is the manner in which your estate will be administered at the time of your death. A will normally must be entered for probate in the county of your residence at the time of your death. Probate is a court-supervised procedure that can take anywhere from nine months to a year to complete. Additionally, a notice to creditors must be published in the newspaper, a petition for probate must be filed with the court, and the court must authorize distribution of your estate following administration.

Why Use a Revocable Living Trust?
The primary purpose of a trust is to avoid probate. Typically, you would transfer your assets out of your name as an individual and into your name as trustee of your trust. During your lifetime, you would have the power to amend or revoke the trust and add or withdraw property from the trust. All income would be payable to you, during your lifetime, exactly as it is without a trust. Additionally, you could withdraw principal in such amounts as you deem necessary or appropriate. The trust would provide, however, that upon your death, the person you designate as the successor trustee would be required to follow your directions with respect to distribution.

Tax Implications
During your lifetime, there would be no income tax consequences to a trust. Income would continue to be reported using your Social Security Number. As long as you serve as the trustee, you would not have to obtain a separate tax identification number for the trust. The appointed successor trustee has the power to obtain a separate tax ID for the trust, without the necessity of probate or authority of a court.

Maroney Associates, PLLC understands that everyone has a different set of circumstances when it comes to estate planning. Our New York trusts and estate attorneys will use our experience, knowledge, and understanding of the state and federal laws to create a comprehensive end of life strategy that fits you and your loved ones’ needs. Contact Maroney Associates, PLLC for advice regarding your specific situation.


 




Based in Melville and Garden City, New York, the attorneys at the Law Offices of Maroney Associates, PLLC assist clients throughout Nassau County, Suffolk County, Queens, and the cities of Mineola, Hempstead, New Hyde Park, Franklin Square, Williston Park, Queens Village, Melville, Huntington, Farmingdale, Patchogue and Uniondale, NY.



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