Is a Living Trust Right for You?

Use these links to jump to different sections:

• What Is the Difference Between a Living Trust and a Will?
• Understanding the Role of Grantors and Successor Trustees
• Separating Trust Assets in a Living Trust
• The Benefits of Having A Living Trust
• Find an Experienced Attorney for Your Estate Planning Needs

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 Is the Difference Between a Living Trust and a Will?

What’s the difference between these two legal documents?

• Generally, a will (short for “last will and testament”) accomplishes the distribution of assets to beneficiaries and dependents (such as minor children) upon death.
• By contrast, a living trust first houses the assets while the individual is alive and then distributes them after their passing.

Understanding the Role of Grantors and Successor Trustees

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 the case of incapacity, 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. 

Separating Trust Assets in a Living Trust

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 bank 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 set up a living trust document and ensure it aligns with your specific circumstances and goals, the cost and logistics of retitling assets to transfer property 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.”

The Benefits of Having A Living Trust

Finalizing a will in New York requires notifying the closest blood relatives about the deceased’s wishes and having an executor of the estate be approved by the probate court, which is a matter of public record.

Bypass the Probate Process

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, siblings, or other family members—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.”

Avoid Probate Issues with Property in Multiple States

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.

Find an Experienced Attorney for Your Estate Planning Needs

If you have questions about setting up a living trust or the legal documents you need as part of your estate plan, use the Super Lawyers’ directory to locate an experienced estate planning attorney in your area for legal advice.

For more information about the different types of trust, see our overview of estate planning and related legal content.