Creating an estate plan takes time. There are so many ways to approach the estate planning process, and what one person finds necessary, someone else may not. Take trusts for example. There are different types, and not everyone may see their benefit. This week, this column will go over the basic benefits of having a trust and what New Jersey residents need to do to set one up.
A trust is a good way to manage property and ensure that beneficiaries receive what is intended for them upon one's death. Before deciding if creating a trust is worth one's while, it is necessary to look at a number of factors. Some of these factors include:
- Estate size
- Age of the potential trust owner
- Marital status of the potential trust owner
- The goal of the trust
Sizeable estates can usually benefit from trust creation -- particularly for the tax benefits. However, it all depends on to whom assets will be left. For example, if a spouse is the sole beneficiary, a trust may be completely unnecessary.
Most trusts do not kick in until the trust owner passes away. A living trust is an exception here. With a living trust, property is transferred to the trust while a person is still alive. This type of trust must be meticulously maintained and may not be amendable. While it has its place, it is not for everyone.
Creating a trust can take time. One must decide what property should be included in the trust, determine what type of trust one wants, name a trustee to manage the trust and set the terms for property distribution to beneficiaries. Legal counsel can not make these decisions, but they can offer guidance, draw up documents and ensure that the trust documents are valid and legally binding.
The last step in setting up a trust is funding it. It may seem an obvious thing to do, but some people fail to do it, making their trusts pointless. Legal counsel can expand on this subject.
Estate planning and trust creation may seem difficult and overwhelming to a number of New Jersey residents. It does not have to be, though. Legal counsel can help one create an estate plan that offers the protections desired, which may or may not include a trust.