In general, people establish a trust for their own financial purposes or to financially protect their family members. Many different types of trusts exist that can accommodate the different reasons people have. At Klatsky & Sciarrabone, our attorneys help you figure out which trust will work best for you and your needs and then guide you through the entire process.

To learn more about trusts and if you will need an estate planning lawyer in New Jersey to help you with it, contact our office today either using the online form or calling us directly at 732-741-3200 to schedule a consultation. 

Trusts as Part of an Estate Plan 

A trust is a way for a property owner to pass their assets to someone else to protect the assets and to avoid the probate process. The trustor, also referred to as the settlor, is the owner of the property and transfers it to the trustee. The trustee is the one who manages the property for the benefit of someone else, known as the beneficiary, in accordance with the terms of the trust. The beneficiary is a person or entity for whom the trust was established. 

Trusts can have multiple trustors, trustees, and beneficiaries. Typically, a different person or entity serves each of these unique roles. Sometimes, though, the trustor can act as both the trustor and trustee. Likewise, in limited situations, the trustee can act as both the trustee and the beneficiary.

As part of an estate plan, a trust can be used to minimize estate taxes (for someone with a large estate). But they offer other benefits, too, if well-crafted. A trust can keep your assets private even when you die because a trust does not need to go through probate, and probate is a matter of public record. Also, a trust can protect assets from creditors or help beneficiaries who cannot manage money well.

Whatever your need is for a trust, our lawyers can help make sure your trust is drafted in a way that benefits you and the intended beneficiaries.

Types of Trusts 

Specific types of trusts that people can use to protect their assets or pass their property on to someone else come in many forms.

All of these trusts are either revocable or irrevocable. 

Revocable trusts, also known as living trusts, allow the trustor to continue to alter the property in the trust. They can even revoke the trust entirely. This gives the trustor far more control over their property. With that control, though, comes a downside: because the trustor still has access to the property in the trust they created, their creditors can often reach into the trust to satisfy debts owed to them.

Irrevocable trusts, on the other hand, cannot be changed or revoked once the trustor creates one without authorization received from a court of competent jurisdiction. The trustor relinquishes control over the assets in the trust. Creditors typically cannot touch those assets once they are removed from your estate. Often, the trustor gains in terms of tax and probate avoidance.

Further, trusts are either inter vivos or testamentary.

Inter vivos trusts, are trusts which go into effect during the trustor's lifetime.

Testamentary trusts, by contrast, are trusts created and embodied in a will which do not become effective until the testator dies.

Benefits of a Trust 

As mentioned, trusts are beneficial to avoid probate and taxes. By using a trust (in addition to a will or in lieu of a will), assets of a trust pass directly to the trust's beneficiary when the trustor dies. This process means the assets do not go into the trustor's estate – they are transferred inter vivos, or between living people. Using a trust to pass property to your heirs can have tax advantages and can avoid the potential legal complications of dividing your estate.

A trust also gives you the ability to create instructions and conditions for asset distribution upon your death–giving you control over your assets even when you are not here. So, if you have a beneficiary whom you want to finish college before disbursement of funds or if you want only a certain amount of funds disbursed at different times in the beneficiary's life, you get to decide those things. Further, you can identify a successor trustee––someone you know who can manage the trust according to the terms and conditions.

Contact Klatsky & Sciarrabone Today

Whether you have some or a lot of assets, a trust may be just the thing you need to manage those assets and to decide what's done with them upon your death. Our lawyers will consider what you want the trust to do for you, review the assets you want to transfer to the trust, and guide you through the entire process, providing legal advice as you need it or the situation demands it. 

To learn more about trusts and how a specific one can benefit you, contact Klatsky & Sciarrabone either online or at 732-741-3200 to schedule a consultation.