Planning for death can be very overwhelming. However, it can be very beneficial to do so. By creating an estate plan, an individual can prepare for what will happen to their assets after they pass away. It allows them to have control over their lifelong cherished possessions when their life is over. When creating an estate plan, there are several different options available to an individual. In doing so, one may wish to set up a trust as a way to manage their estate.
A person who creates a trust is known as the “trustor,” while the person who benefits from it is known as the “beneficiary.” In dealing with a trust, there is a third party involved, known as the “trustee.” A trust allows the trustee to take care of the assets on behalf of the beneficiary. In the state of New Jersey, there are several types trusts available to individuals for their estate plan.
Benefits of a Trust
Creating a trust is different from a will. A trust can avoid the process of probate, whereas a will cannot. This makes it possible for a beneficiary to have access to the deceased individual’s assets much faster than waiting for probate to end. Setting up a trust in an estate can also save a beneficiary from certain legal fees and taxes. By creating a trust, the trustor is able to control their wealth and ensure assets end up exactly where they planned.
Irrevocable vs. Revocable Trusts
People have options when they want to create a trust for their estate. Deciding which type of trust they want depends on their own personal situation. It can depend on what they wish to leave behind in addition to how much control they are looking to have over the trust once it is made. There are two main types of trusts in the state of New Jersey. Individuals have options of In the state of New Jersey, there are two main types of trusts. The two main types of trusts are:
- Revocable Trust: May be updated or terminated at any time without permission from the beneficiary.
- Irrevocable Trust: Requires the trustor to give up their rights to the trust. This means they cannot change the trust without the permission of the beneficiary.
Other Types of Trusts
In addition to these two trust, there are several other options available to trustors. Each and every trust has a different purpose to suit certain situations. This is why it is important to have experienced legal counsel to ensure an individual sets up a trust that is right for them. These types of trust can be used depending on who the trustor is leaving the estate to in addition to what it is they are leaving them (money, a charity, etc). Other common trusts may include:
- Asset protection trusts
- Life insurance trusts
- Testamentary trusts
- Charitable remainder trusts
- Charitable leads trusts
- Inter vivos trusts
- Supplemental needs trusts
- Special Needs Trusts
- Generation-skipping trusts
- Qualified personal residence trusts
Contact our Firm
If you or a family member is looking to create a will for your estate and wish to speak with an experienced attorney, contact Margaret M. Mahon, Esq. LLC today.