Sometimes, people in New York and other states see that assets that were acquired and maintained through years of hard work end up in state coffers after the death of the owner of those assets. Oftentimes, that happens due to inadequate estate planning. As many people may already know, trusts can be a means of making sure that assets are protected.
In New York, an individual can create a trust for any lawful purpose. The creator of a trust can revise or rescind a part or whole of the trust at any point, provided that creator has written consent from all the persons who are beneficially associated with the property that is held in that trust. It is possible to create three types of trusts in New York: lifetime trusts, honorary trusts for pets and charitable trusts.
A lifetime trust can be created by a person who is still alive. This is different from trusts that are created according to the directions in someone’s will. A lifetime trust allows the creator to dispose of all property through that trust. It is an irrevocable trust, unless it is expressly mentioned that the trust is revocable.
The honorary trust is an instrument through which the creator can leave means for the protection of a domestic animal or a pet. The life of this trust extends to the life of the pet or until the end of the twenty-first year since the creation of that trust, whichever of the two conditions is fulfilled earlier.
Charitable trusts allow the creator to dispose of property for charitable, religious, educational and benevolent purposes. According to New York trust laws, a charitable trust cannot be invalidated by reasons such as indefiniteness or uncertainty of the people who are designated as its beneficiaries.
Trusts are covered in Article 7 and Article 8 of the New York’s Consolidated Laws of Estates, Powers and Trusts. While Article 7 deals with trusts in general, Article 8 deals specifically with charitable trusts. An overview of trusts in New York may be beneficial for those who are considering this estate planning option.