By now most people know that trusts avoid probate which is required with a will — if there are “probatable” assets, in other words those in your name alone. While many assets can be set up to avoid probate by putting joint owners on or by naming beneficiaries, titles to real estate in New York may not have beneficiaries and there are tax and liability reasons for not naming joint owners on real estate. As a result, real property generally goes through probate.
Other reasons to use trusts, besides avoiding probate for the home, are as follows:
- Out-of-State Property. New York residents who own property in another state face two probates, one in New York and another in the other state. However, you may transfer both properties into your New York trust and avoid the “multiple probate problem”.
- Trusts Are Private. Unlike wills, trusts are not filed in court, so there is no public record of how much you had, who you left it to, where they live, and who you left out.
- Special Needs Children. If you leave assets to a special needs child in a will, the court will appoint a lawyer to represent the special needs child which will require your estate to pay two lawyers and significantly delay the proceedings.
- Keeping Your Assets in the Bloodline. Wills generally leave assets to your children and have no provisions for what happens after they get the inheritance. As a result, when your child dies, assets often go to in-laws and their families. Trusts can provide that your assets will stay in your bloodline for generations to come.
- Protecting Assets from Long-Term Care Costs. Wills take effect on death and offer no long-term care asset protection. Often, the cost of care ends up leaving nothing for the heirs at death. Medicaid Asset Protection Trusts not only avoid probate, but also protect assets from being lost to long-term care costs.