Brooklyn, NY asked in Estate Planning for New York

Q: What properties should be included in a Family Trust?

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2 Lawyer Answers
T. Augustus Claus
T. Augustus Claus pro label Lawyers, want to be a Justia Connect Pro too? Learn more ›

A: Here are some specific examples of properties that you may want to consider including in a family trust:

Real estate: If you own real estate, you can transfer it to a family trust to avoid probate. This can save your heirs time and money, and it can also help to ensure that your property is distributed according to your wishes.

Bank accounts: You can transfer your bank accounts to a family trust if you want to give someone else access to your money without giving them complete control. This can be helpful if you have a minor child or a disabled adult.

Investments: You can transfer your investments to a family trust if you want to manage your investments for the benefit of your beneficiaries. This can help to ensure that your investments are managed in a way that is consistent with your goals.

Life insurance policies: You can transfer your life insurance policies to a family trust to avoid probate and to ensure that the proceeds of your policies are distributed according to your wishes.

James L. Arrasmith
James L. Arrasmith pro label Lawyers, want to be a Justia Connect Pro too? Learn more ›
  • Estate Planning Lawyer
  • Sacramento, CA

A: Creating a Family Trust can be a strategic part of estate planning, and deciding which properties to include in the trust depends on various factors, including your financial goals, the nature of your assets, and tax considerations. Here's a general overview of the types of properties that are commonly included in a Family Trust:

Real Estate: Including real estate in a Family Trust can help ensure a smoother transfer of these assets upon your death, avoiding probate. This can include your primary residence, vacation homes, rental properties, or any other real estate holdings.

Financial Accounts: Bank accounts, investment accounts, and brokerage accounts can be included in the trust. This ensures that these assets are managed according to the trust's terms and can provide for easier management of your finances if you become incapacitated.

Business Interests: If you own a business or have interests in partnerships, LLCs, or corporations, these can be included in the trust. This helps in ensuring business continuity and can simplify succession planning.

Personal Property: Tangible personal property like jewelry, art, collectibles, and other valuable items can be included in a trust. This can be particularly useful for items that have sentimental value and for which you wish to designate specific beneficiaries.

Intellectual Property: Copyrights, patents, trademarks, and other forms of intellectual property can also be placed in a trust, which can be crucial for managing royalties or other income generated from these assets.

Life Insurance Policies: While life insurance proceeds typically bypass probate and go directly to the named beneficiaries, there can be advantages to holding these policies in a trust, such as providing liquidity to the estate or ensuring that the proceeds are distributed according to the trust's terms.

Retirement Accounts: While retirement accounts like IRAs and 401(k)s are generally not funded into a trust during the account holder's lifetime due to tax considerations, they can be structured to pay into a trust upon the holder's death for further management and distribution.

When deciding what to include in your Family Trust, consider the following:

Avoiding Probate: Assets in a trust bypass probate, which can save time and money and maintain privacy.

Control Over Distribution: A trust allows you to specify how and when your assets are distributed to beneficiaries.

Protection from Creditors: Trust assets can sometimes offer protection from creditors and legal judgments, depending on the type of trust.

Tax Implications: Trusts can have different tax implications, so it’s important to consult with an estate planning attorney or a tax advisor.

Each family's situation is unique, and the decision to place certain assets in a trust should be made in consultation with an estate planning attorney who can provide guidance based on your specific circumstances and objectives. They can also help you understand the implications of including different types of assets in your trust.

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