A revocable trust in New York gives the grantor, or creator, more control of their assets. It allows the grantor to change the content as they see fit. However, there are assets that can and can’t go into a trust.
While cash can’t be directly placed into trusts, the grantor may transfer the ownership of a financial account. Financial accounts may include savings or checking accounts, safe deposit boxes, stock certificates and money marketing accounts. However, it isn’t advised to place active financial accounts that the grantor uses to pay bills in trusts.
Putting a life insurance policy in a trust benefits the grantor, such as for health care and creditor protection. However, it could create some tax implications for heirs, and creditor protection is only for individuals in some states.
Real estate, business and personal assets
Real estate can go into a trust, even if it has a mortgage, and it saves the heirs the time and cost of probate court to pass on the property after the grantor’s death. The only thing the owner must do is transfer the title and get permission from the lender for mortgaged property. Once the title gets transferred, the trust heir inherits the mortgage, but the lender can’t force full payment upon transfer.
Transferring businesses to a trust saves the heirs from having to operate under an executor until probate ends. It is commonly simple to transfer a sole proprietorship or partnership, but an LLC will need the consent from a majority of owners. Some other assets that can go into a trust include oil, gas and mineral rights as well as artwork, furniture and valuable collections.
Not all assets are suitable for trusts, such as vehicles and retirement accounts. If a grantor isn’t sure what to include, they should learn more about their options.