In New York, many people set up a trust in order to add a layer of protection and place assets with a specifically designed legal entity. This may be a family member or, more often, a trusted attorney who approves expenditures from the trust. Sometimes it is necessary to set up a trust because you are simply too sick to properly administer your property and assets. Most times, the trust is activated upon the death of the owner.
According to the New York Law Code Section 4, all debt, administration expenses and any funeral costs are deducted before any funds are distributed. Taxes are not assessed right away; this comes to the receiver of the trust fund.
The trust is distributed according to the document that outlines the distribution. If this does not exist the following holds true: The spouse and any children will receive $50,000. Half of the value of the home will be given to the surviving spouse and the other half divided up among the children.
If there are no children, the spouse will be the only recipient of any funds from the trust. If there is likewise no spouse and only children, they will divide the assets equally among themselves. Also, if there are no children and also no surviving spouse, the trust is fully given to any parents of the decedent that may still be living.
Trusts will automatically go to any grandparents that are still living if there is no one else alive to receive the assets of the trust.
You can easily see that having a professional draw up your trust is extremely important. Leaving your assets and property for the court to decide could end up as a disaster. You know to whom you wish to leave your assets when the time comes. Don’t be caught off guard.
Source: FindLaw, “N.Y. EPT. LAW § 4-1.1: NY Code – Section 4-1.1: Descent and distribution of a decedent’s estate” Sep. 11, 2014