What is a living revocable trust with an incapacity clause?
A living revocable trust with an incapacity clause is a type of estate planning in which the trustee has the discretion to distribute assets to beneficiaries as they and their family members deem fit. The trustee can be given only general, broad guidelines for distribution. This means that assets can only be distributed if they are specifically granted by a beneficiary or a court order. A NY estate attorney can help set up a living trust as an estate planning tool.
Why do people create revocable trusts?
People use revocable trusts for a variety of reasons. They may establish trusts for children, to give assets to charity or to simply reduce their estate taxes. They use irrevocable trusts for the same reasons – but they also use them for estate planning purposes.
Many people use irrevocable trusts to reduce the tax liability from their estate when they die. This is called “stepped-up” or “step-up” basis. With an irrevocable trust, the beneficiaries receive a larger portion of their inheritance than they would otherwise. The trust itself benefits from these larger distributions. This is because the trust receives the assets that have been distributed out over the years, but it does not receive any new assets during your lifetime.
What happens if the trustee is incapacitated?
In a living revocable trust with an incapacity clause, the trustee is encouraged to appoint an alternate to act in their stead in the event of incapacity. If this is not possible, every revocable trust has to name a successor trustee who can take over the responsibilities and duties of the original trustee. This way, assets are disbursed properly.
How can I restate an Irrevocable trust in New York City?
Irrevocable trusts are living trusts, established with a written trust agreement or declaration of trust and a separate document that contains the “disposition” of assets. These two items together create an irrevocable trust. The disposition is the language that specifies what will happen to the property when you die.
Get a free consultation with the local estate planning experts at:
Roman Aminov Esq. Estate, Probate & Elder Law of Queens 147-17 Union Tpke, Queens, NY 11367 (347) 766-2685 https://www.aminovlaw.com/