If you are considering an update to your estate plan or perhaps you are looking to engage in estate planning for the first time, you may be considering creating a Living Trust or a Revocable Trust.
A Living Trust is a trust established and funded during your lifetime - it can serve a multitude of purposes depending on your goals. Sometimes Living Trusts are created for asset protection purposes, but often Revocable Living Trusts are used as a tool to avoid probate. Avoiding probate is appealing to some for privacy reasons or perhaps as an attempt to prevent a Will challenge. A Revocable Trust does not require that your next of kin be notified the way that the probate of a will does and therefore there is less opportunity to challenge the terms of the trust and the trust will not become public record.
When using a Revocable Living Trust in lieu of a Last Will and Testament as a means to avoid probate, the key is to make sure that ownership of all of your assets has been transferred to the Trust before your death. This can be done very simply in the case of bank accounts and investment accounts, but things like real estate require more work.
If you own real estate, you will need to execute a new deed transferring ownership from your individual name to that of your Trust. You will also need to sign and file the ancillary transfer documents required by the county in which your property is located. This means that in addition to the legal fees associated with drafting the Trust, you will need to pay a recording fee to the county.
If you happen to be the owner of a cooperative apartment, the logistics involved in transferring ownership to your trust are even more involved. The first being that you will need to get board approval from the cooperative board or management because the ownership stock certificate and proprietary lease must be changed to list the trust as the owner. While most cooperatives will allow you to transfer your apartment to your trust, the board and their attorney will require that you execute a number of documents in which you agree to be personally responsible for the use and occupancy of the apartment even after the transfer is complete. It is very common for the cooperative and their attorney to charge a fee for the closing. Furthermore, if your cooperative is subject to a mortgage, your bank will have to consent to the assignment of the loan to the trustee, although you will still remain personally liable on the loan. Transferring a coop may add an additional few weeks to a few months to the finalization of your estate plan because of the involvement of the coop board, coop attorney, and bank.
If you are considering creating a Living Trust but you have concerns about the nature of your property and how you will go about transferring your coop apartment, our Queens & NYC based estate planning attorneys are here to help. Call us at 347-766-2685 to discuss your estate plan today.
This article is for educational purposes only - to provide you general information, not to provide specific legal advice. Use of this post does not create an attorney-client relationship and information contained herein should not be used as a substitute for competent legal advice from a licensed attorney in your state.
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