The probate litigation process can be long, time-consuming, expensive and very public. Sometimes it can lead to contentious litigation that can rip apart families.
In New York, depending on your estate planning goals, you very well could avoid probate entirely with a trust.
Living trust
During your life, you can create a living trust and name yourself as the trustee to retain control over the trusts’ assets. Of course, you would name a successor trustee for after you pass. The assets were formerly in your name, but you transfer your assets into the trust.
Living trusts avoid probate because all of the assets in the trust are in its name, not your name anymore. Your successor trustee can distribute the trust’s assets to named beneficiaries according to the living trust documents after you die entirely outside of probate after you die.
The advantages of a living trust
A living trust can help you avoid probate. In addition, you can include provisions on how to provide assets to beneficiaries and in what scenarios, and even provide overcite. It provides protection from creditors and financial predators, and it can help avoid or reduce taxes.
The disadvantage of a living trust
Nonetheless, living trusts are not perfect instruments. They can be costly, complicated and harder to set up and maintain than other estate planning options. They require that you periodically transfer assets to them as you must ensure that you do not have assets left to necessitate probate. Any items that are left out of the trust will need to go through probate.
There is also the requirement of separate tax filings, and your living trust does not provide you with protection from creditors or lawsuits while you are alive, like other types of trusts.
The takeaway
In New York, is it possible to avoid probate with a trust? Yes. It absolutely is possible, and a living trust is just one method of avoiding probate with a trust. There are other forms of trusts and other methods of avoiding probate.