A revocable living trust is effective for people who are single, married, blended families and people who have beneficiaries with special needs in New York. Also, with the change in the law, it is effective for same sex couples as well. Basically, what you do is you make a contract with yourself where you play three different roles. The first role is called the Settler. That’s the person that creates the trust. The second role is called the trustee, and it is the person who manages the trust assets. The third role is called the beneficiary. The beneficiary has the right to receive income and gifts from the trust.

According to the Balance, most people move assets like real estate, financial accounts and personal property like cars, boats and planes into their trust. Everything that the trust owns avoids probate. If you own real estate in a different state, then you want to make sure that you move that real estate into your trust as well. That way, you can avoid doing probate in the other state. However, there are some assets that you typically don’t move into the trust. For example, life insurance is paid directly to your name. Beneficiary life insurance proceeds are paid automatically outside of the trust and outside of probate by operation of law. The same is true with payable on death accounts like 401K and IRA accounts. Those accounts are paid directly to your name beneficiaries.

However, sometimes people do decide to make their trust the beneficiary of a life insurance policy or their retirement account in order to provide additional cash to their trust at the time of their death or if they have a special needs beneficiary. One of the great things about a trust is that it is effective the day you sign it. It is effective if you are alive but become incapacitated or if you pass away. This gives you a financial plan in place to take care of all the different events that will occur at some point during your lifetime.

This article does not offer legal advice.