Choosing the Right Document for Estate Planning in New York: Understanding the Difference Between Wills and Trusts
A will and a trust are two of the most important documents a person can create to ensure their assets are distributed according to their wishes after death. In New York, these two documents have different rules and requirements. Knowing the differences between the two can help you make the best decision for your estate planning needs.
A will is a legal document that explains how a person wants their assets to be distributed upon their death. The person making the will is known as the testator. In New York, the law requires that the testator be of sound mind and at least 18 years of age when the will is made. The will must be in writing and signed by the testator and two witnesses. Once the will has been signed, it can be changed or revoked if the testator chooses to do so.
A trust is a legal arrangement in which a person (the grantor) appoints a trustee to manage their assets to benefit another person or persons (the beneficiaries). The trustee is responsible for following the instructions of the grantor, which are written in the trust document. Unlike a will, a trust does not require witnesses or filing with the court. A trust can also be modified or revoked at any time by the grantor, as long as they are mentally capable.
The primary difference between a will and a trust is how the assets are distributed and managed. With a will, all assets are held in the testator’s estate and distributed according to their wishes upon their death. With a trust, the assets are managed by the trustee and distributed to the beneficiaries according to the trust document. This allows more flexibility, as the trust can be designed to continue for several generations or provide for the specific needs of the beneficiaries.
In New York, wills and trusts have their own advantages and disadvantages. Wills are simpler and more straightforward to create, but they do not allow for the same level of flexibility as a trust. A trust, on the other hand, allows for more control over how the assets are managed and distributed, but it can be more complex and expensive to create.
When deciding between a will and a trust in New York, it is important to consider your individual estate planning needs. If you have a straightforward estate and want to ensure that your assets are distributed according to your wishes upon your death, then a will may be the best choice. However, if you have more complex estate planning needs that require greater control over how your assets are managed and distributed, then a trust may be the better option.
If you need to create or update an estate plan, contact us at 516-570-4016.