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What is a Trust?

A trust is a legally enforceable arrangement in which you (the trust creator) appoint one or more people or an institution (the trustee—can be you or someone else) to hold and manage and/or invest certain of your assets (the principal) for the present and/or future benefit of someone else or of an entity (the beneficiary or beneficiaries).

The trustee has the legal responsibility to follow your instructions on how to manage and distribute the trust assets, whether the trust lasts for a limited number of years or for the entire lifetime of a beneficiary or beneficiaries. With extremely few exceptions, a trust must be created in a written document similar to a will.

When you intentionally create a trust with respect to property that you own or have a future right to own, you create what is called an express trust. There are two types of express trusts most commonly used in estate planning: living trusts and testamentary trusts:

  • A living trust is one that operates while you are alive and benefits specific people, such as you during your lifetime, and after you die, your wife, your children and/or grandchildren, or friends by providing, for example, income, use of property (like a car) or a place to live (the trust can pay mortgage and taxes). You do not have to make yourself a beneficiary of your living trust.
  • A testamentary trust is one that you create as part of your will, and it begins operating after you die.

A special type of express trust is commonly used to care for someone with an extreme mental or physical disability:

  • In a supplemental (or special) needs trust, you create a plan and framework to provide for the needs of a mentally and/or physically disabled person who has long-term healthcare and social service needs.

Another feature of a New York trust can be used to help mentally disabled people, as well as those who cannot manage money well or who have many creditors. You may worry that this type of beneficiary will squander, be duped out of trust income or principal or simply give it to bill collectors:

  • A spendthrift trust can shield the trust from creditors and financial predators. When you create this type of trust, you ensure that the trustee retains tight control over the principal and can go so far as directing the trustee to determine the beneficiary's income needs so that the trust only releases amounts required for living. In addition, you can arrange it so the beneficiary has no ability to assign the trust assets to creditors, who therefore have limited collection options given the limited income given to the beneficiary.

Why would I create a trust?

What can I put into a trust?

What do I do with the property I want to put in the trust?

If I put my assets into trust, do I still need a will?

Can I amend or revoke a trust?

I would like to create a trust:

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