Hybrid Estate Plans

Funny legs in socks of different colors on white background.

{Read in 5 Minutes}  As a Trust and Estates attorney, I very often meet with clients to discuss their potential estate plans. All of them have a specific goal in mind. Upon their death, they want to ensure that any assets they have go to the beneficiaries that they care about the most, whether they be:

family members,

young or grown children,

a surviving spouse,

•children of a surviving spouse,

•a good friend, or

•a charitable institution.

Perhaps they want to disinherit someone explicitly, such as an ex or soon-to-be-ex. The one thing that is important to them is what is important to everyone who sits down and puts pen to paper on an estate plan — they want to make sure that their wishes are carried out.

At the threshold, one of the first things that a client may want to discuss is whether they want to have a Will, or whether they want a Revocable Trust. Like most attorneys, I have certain opinions about this, believing that a Will is a simple and preferred way to create an estate plan, at least in New York, where probate is relatively quick and inexpensive as compared to other states.

There are some people who are very insistent on having a Revocable Trust. Usually, they feel that they should have a Revocable Trust because some media personality said on a show that probate is to be avoided at all costs. As I said before, a Trust is appropriate for some people, but it is not my personal preference to draft for clients. In my experience, Trusts tend to complicate issues and often result in the client leaving the office with a complicated document full of legalese that is not written for the client to understand. However, there are some people who do absolutely insist on having a Revocable Trust. It’s simply a matter of client choice and preference after educating themselves on the pros and cons.

Sometimes a new client will come into my office to discuss a new Estate. Sometimes this new Estate will be what I call a Hybrid Estate, which means that the person has both a Will and a Trust. While most clients who write a Revocable Trust will also write a Will, the goal of the Revocable Trust is to transfer all of one’s assets into that Revocable Trust, so probate becomes unnecessary. When the deceased fails to do that, i.e. they own some assets in Trust and some assets in their individual name, this creates the Hybrid Estate. There is still a Trust to administer, and the Nominated Executor needs to offer the Will for probate at the Surrogate’s Court. Again, as I mentioned above, I don’t find this to be a particularly big deal, but it’s sort of frustrating to those close to the Decedent who were told that the Decedent was writing a Trust simply to avoid probate.

However, these Hybrid Estates get administered just like any Estate. I, or any other Trust and Estates attorney, can counsel a Trustee and an Executor (very often the same person, as the client most likely chose the person they trusted the most for both roles). All that is involved is filing a Surrogate’s Court proceeding to collect the assets that are not already in the Trust. If the amount of assets is large, this will be a traditional probate proceeding. If there is a small amount — presently defined as less than $50,000 — we can help that nominated Executor start a Voluntary Administration proceeding to collect those assets or to streamline the court process.

Much like anything else, making sure that the Executor and Trustee have plans to coordinate the assets and carry out the wishes of the deceased is what is tantamount here. We can help.

For more information on this topic, please contact me.

Thomas Sciacca

 

Thomas Sciacca

www.sciaccalaw.com
Tom@SciaccaLaw.com
(212) 495-0317