Is a Living Trust Right for You? 

A living trust is an estate planning tool that, like a will, allows people to make end-of-life decisions about what happens to their assets and belongings after death. 

What’s the difference between the two? Generally, a will transfers assets to beneficiaries upon death, whereas a living trust first houses the assets while the individual is alive, then distributes them after their passing. The grantor—the person creating the trust—could oversee the assets if they choose, and several successor trustees could also be named. Doing this at the outset would prevent a future court proceeding—and the commensurate time and expense—to later add trustees when the grantor dies or becomes incapacitated. 

For example, suppose the grantor develops dementia. In that case, successor trustees are already in place to pay bills and assume oversight of their accounts, property and personal needs, says Mary S. Croly, an estate planning attorney and partner at McLaughlin & Stern. Since there’s no need to pursue a guardianship order through the courts, it’s a “seamless progression” without any delays. She says this peace of mind can be a significant motivator for those looking to lessen the stress on friends and loved ones who will assist with settling their estate.  

However, any assets in a living trust cannot be jointly shared, unless you separate your portion. “Only those in your name alone, without a beneficiary designation, are transferred to a trust,” says Croly. These typically include checking and savings accounts, real estate, stocks, or belongings such as artwork. Retirement accounts and life insurance policies are excluded and transferred upon death per beneficiary designations. 

Although an attorney can assist in drafting the trust documents and ensuring they align with your specific circumstances and goals, the cost and logistics of retitling assets for transfer to the trust may deter some. Croly says most financial institutions require you to open new checking or savings accounts instead of renaming the old ones, but “typically financial advisors know the drill and will move your money and brokerage assets to a trust without a fee.” 

Finalizing a will in New York requires notifying the closest blood relatives about the deceased’s wishes and having an executor of the estate to be approved by the courts, a process known as probate. But a living trust bypasses this step. “If all of your assets are in a trust or pass through beneficiary designations, then usually there’s no need for probate,” says Bruce D. Steiner, an estate planning and trusts attorney at Kleinberg, Kaplan, Wolff & Cohen.  

Because of this, living trusts can be a good option for those with no living spouse, children, parents, or siblings—or for those who suspect someone may contest the will, says Croly. If a will is challenged, the distribution of the assets can be delayed while the court considers the claim’s validity, and additional legal expenses are likely as well. 

Steiner says those unfamiliar with their family trees should evaluate the merit of a living trust: “It’s particularly relevant in New York, where a Holocaust survivor might reside and not know who or where their next of kin are.” 

Those who own personal property in multiple states may benefit, too. If you live in New York but own a condominium or tangible property elsewhere, a living trust can avoid a probate proceeding in these secondary locations.   

Still, even when there’s no compelling reason for a living trust, there’s often an emotional component at play. “Some people just like the idea of making things a bit simpler after they’re not around,” Steiner says. But if you go this route, be prepared to pay upfront. “With a will, someone else writes the checks after your death to settle accounts,” he says.