Is a Revocable Living Trust the Right Tool for Your Estate Plan?

When preparing an estate plan in New York, you have several options when it comes to the tools that are available for ensuring that your loved ones will be able to take possession your assets after your death. From simple wills to beneficiary designations on investment accounts and life insurance policies, these tools all serve different purposes, and in many cases have their own unique benefits and limitations as well.

In recent years, the estate planning tool known as the “revocable living trust” has gained widespread popularity for individuals of all ages planning their estates in New York. The revocable living trust offers several benefits, and in many cases it can serve as the primary document in a person’s estate plan. However, before you jump into forming a trust, it is important to understand how (and why) they work, and you should make sure that you have fully considered all of the other options that are available.

What is a Revocable Living Trust?

A revocable living trust is an estate planning tool that uses the trust structure to keep assets out of probate. A trust is a legal device created by a document that identifies three key roles: the grantor, the trustee, and the beneficiary. The grantor is the individual planning his or her estate; and, once the trust is established, the grantor transfers certain assets into the trust. Those assets then become the property of the trust, subject to management and control by the trustee. With a revocable living trust, the grantor will generally also be named as the trustee and beneficiary during his or her lifetime, allowing him or her to retain ownership, use, and control of the trust assets until death.

Upon the grantor’s death, the trust documents will designate both (i) who is to take over as trustee, and (ii) who will become the new beneficiaries of the trust. The trustee is responsible for administering the trust and managing the trust’s assets until they are distributed to the beneficiaries in accordance with the grantor’s final wishes (as set forth in the trust documents).

What are the Benefits of Using a Revocable Living Trust?

Revocable living trusts offer numerous benefits. Two of the most important benefits are:

  • Flexibility
  • The ability to avoid the probate process

Since these trusts are “revocable,” they can be modified or terminated at any time. In addition, once the trust structure is in place, you can continue to place new assets into the trust without needing to modify your estate plan. This level flexibility is largely unique among estate planning tools, especially when combined with the other benefits of a revocable living trust.

The other primary benefit is avoiding probate. Probate is the judicial (and public) process of winding up a person’s final affairs. Probate can also be time-consuming and expensive; and, for individuals with large and complex estates in particular, avoiding probate will often be a key component of the estate planning process.

What are the Limitations of Using a Revocable Living Trust?

Of course, revocable living trusts do have some limitations; and, when considering your estate planning options, it will be important to make sure these limitations do not outweigh the benefits of using a revocable living trust. If they do, you will need to carefully consider the alternatives, and you should work with an experienced estate planning attorney to identify the tools that make the most sense for your personal circumstances.

For example, depending on how you structure your revocable living trust, it may be somewhat of a cumbersome process to ensure that the appropriate assets get put into the trust over time. If an asset gets left out of the trust, it will transfer according to the terms of your will (in most cases, when you establish a trust you will also execute a back-up will to cover any non-trust assets). There can be tax and other considerations as well.

Schedule a Consultation with New York Estate Planning Lawyer William M. Finucane

The key is simply to make sure that you make informed decisions about the tools you use to build your estate plan. Attorney William M. Finucane has been providing estate planning services to New York residents for more than 30 years. If you would like more information about revocable living trusts and the other estate planning tools that are available in New York, call (518) 873-6351 or contact us online today.

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What Do I Need to Know Before Buying a Vacation Home in the Adirondacks?

If you are like many people, you have long dreamed of owning a vacation home in the Adirondacks. With more than 3.4 million acres of privately-owned land, unparalleled views, and the largest protected area in the continental United States, the Adirondack Park is, for many, the ideal place to establish a home away from home.

When purchasing real estate in the Adirondacks, there are some important considerations you will want to keep in mind. Most importantly, there is a reason that the Adirondack Park has retained its desirability as a largely-untouched natural environment: The Adirondack Park Agency (the “Agency”) tightly regulates land use and development within the park’s borders. These regulations are strictly enforced, and understanding what you can – and can’t – do with your desired property will be important to making an informed decision about your second home investment.

The Adirondack Park Land Use and Development Plan

The place to start when investigating the land use and development restrictions on a piece of property in the Adirondacks is the Adirondack Park Land Use and Development Plan (APLUDP). The APLUDP divides the park’s private lands into five residential use categories (and one industrial use category):

  • The hamlets are the Adirondack Park’s primary residential and commercial development areas. Hamlet properties have the least-restrictive permit requirements, though property owners must remain cognizant of the Agency’s general regulations.
  • Moderate Intensity Use. The park’s moderate intensity use areas are primarily concentrated on residential development; and, like the hamlets, most land uses are permitted (again, subject to general park regulations).
  • Low-Intensity Use. Low-intensity use areas are similar to moderate intensity use areas, though residential development is less dense. The average lot size among the park’s low-intensity use areas is 3.2 acres, while in the moderate intensity use areas the average is 1.3 acres.
  • Rural Use. In the park’s rural use areas, residential development is more limited (the average lot size is 8.5 acres), and any development must preserve the land’s rural character.
  • Resource Management. Most land use and development in the Adirondack Park’s resource management areas requires a permit, and the Agency maintains a particular focus in these areas on preserving open space and the natural character of the land.

Critical Environmental Areas and Shoreline Protection

In addition, certain areas of the Adirondacks have been designated as “Critical Environmental Areas,” and as such are subject to heightened restrictions with regard to use and residential development. If you are considering a piece of property located partially within one of the park’s Critical Environmental Areas, you will need to be particularly cautious to avoid making unauthorized use of your land. Critical Environmental Areas in the Adirondack Park include:

  • Land above 2,500 feet, excluding hamlet properties
  • Land within 150-300 feet (depending on use classification) of a right-of-way or highway
  • Land within 1/8 mile of a state wilderness area, excluding hamlet properties
  • Land within 1/4 mile of certain designated rivers
  • Wetlands

All shoreline properties (including properties on lakes, ponds and rivers) are subject to lot width and setback restrictions in Adirondack Park as well. Before purchasing a second home in the Adirondacks, you will want to make sure that both (i) the property is legally-compliant in its current state, and (ii) you will be able to use and build on the property as you desire.

Contact Attorney William M. Finucane | Serving the Adirondack Area for Over 30 Years

Attorney William M. Finucane has over 30 years’ experience representing clients seeking to purchase real estate in the Adirondack Park and throughout the Adirondacks. If you would like more information about the land use and development restrictions in the park, call (518) 873-6351 or request a consultation online today.

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Are There Unique Concerns When Buying or Selling Land in the Adirondacks?

The Adirondack Park is unique among the country’s state and national parks. At over six million acres, the park has 3.4 million acres of privately-owned land where the State of New York and residential, commercial, and industrial property owners have all staked claim to their own piece of this protected reserve.

As you might expect, owning land in the Adirondack Park comes with its own unique restrictions and responsibilities. As a result, when buying or selling property in the Adirondacks, it is not unusual to run into a number of potential concerns. Two of these potential concerns include:

  • Permit Violations
  • Property Taxes

Two Key Considerations When Buying or Selling in the Adirondacks

1. Is Your Property (or Future Property) In Violation of the Adirondack Park Agency’s Permit Requirements?

All privately-owned lands in the Adirondack Park are subject to certain permit requirements, as established and managed by the Adirondack Park Agency (the “Agency”). The permit requirements vary depending on a particular parcel’s location and classification, with the least-strict requirements applying in the park’s hamlets, and the most-strict applying in its resource management areas (where residential development is still permitted).

When buying or selling a home in the Adirondacks, whether as a second home or as a primary residence, it is important to determine whether there are any current permit violations on the property. The fact that a permit is required does not necessarily mean that a permit was obtained. As a seller, a permit violation (for example, building a dock or boathouse without a permit in certain shoreline areas) could spell trouble during the closing process. As a buyer, it could mean expensive remedial work (and/or litigation) down the line.

2. What Is the Current Property Tax Assessment?

A second issue that comes as a surprise to many first-time buyers in the Adirondack Park is the issue of property tax. Higher-than-expected tax assessments are not uncommon, and it also is not uncommon to see spikes in tax assessments within the park. These can occur for a number of different reasons. As a result, for buyers, just as important as the current property tax assessment is how high the assessment might go in the future.

When it comes to property taxes, full-time residents and second home owners in the park can face differing concerns. For many full-time residents, the incursion of vacation home development has resulted in increased property tax assessments that, for some, can become unsustainable. Second home owners, on the other hand, may feel as though they are carrying too much of the tax burden given their limited or seasonal use of the park’s public facilities. Regardless of the type of property you intend to purchase, it will be important to understand the property tax implications and make sure you are comfortable shouldering the additional monthly escrow contributions or annual payments. If you feel that the current tax assessment is too high, you may be able to challenge the assessment.

One potential way to mitigate your property tax obligations in the Adirondack Park is to apply for an exemption under Section 480-a of the New York Forest Tax Law. The law only applies to large parcels – 50 acres or more – and there are a number of requirements involved. But, if you qualify, the benefits of securing the exemption can be substantial. While the Adirondack Landowners Association has worked with the Department of Environmental Conservation to open up the law’s tax exemption to more property owners within the park, to date its efforts have been unsuccessful.

Are You Buying or Selling Land in the Adirondacks? Contact Attorney William M. Finucane For More Information

If you are planning to buy or sell a first or second home in the Adirondacks, attorney William M. Finucane can assist you in navigating the unique local issues involved. To speak with Mr. Finucane, call (518) 873-6351 or submit your contact information online today.

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