New York Law (NYLE) Practice Exam

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In order to create a valid irrevocable trust, a trust instrument must be signed by:

Only the grantor, in the presence of a notary.
The grantor and trustee, with proper acknowledgment or witnessing.
Both the grantor and trustee, without any witnesses.
The grantor alone, having it witnessed by an attorney.

The correct answer is: The grantor and trustee, with proper acknowledgment or witnessing.

To create a valid irrevocable trust in New York, the trust instrument must be signed by both the grantor and the trustee, and it should also be properly acknowledged or witnessed. This requirement ensures that both parties have a clear intent to affirm the legal commitments of the trust. The involvement of the trustee is crucial, as they will manage the trust assets and carry out the instructions of the grantor. Proper acknowledgment or witnessing builds additional legal security and verifiability to the trust’s creation. This helps to mitigate potential disputes or claims that may arise regarding the trust’s validity in the future. By having both the grantor and the trustee involved, it establishes a clear and unequivocal understanding of their roles and responsibilities. The other options fail to meet these essential requirements for creating a valid irrevocable trust in New York. The absence of the trustee or the necessary acknowledgments or witnesses could lead to ambiguity about the trust's validity and the intent behind its formation.