Too few New Jersey residents have taken the time to go through the estate planning process. Some believe it is not necessary, while others think about it but just never get around to it. Having some sort of plan in place is better than nothing, but how in-depth does that plan need to be and what should it include — a will or trust, for example?
A will is a document in which a person expresses his or her wishes for the passing on of his or her estate. One can name beneficiaries and specify who gets what — among other things. It is a formal document that is definitely good to have as a starting point, but it can be challenged in court if there are any concerns regarding its validity or contents. If a will is successfully contested, one’s wishes may not be carried out as envisioned. Revisiting and updating wills every few years or after a significant life change is always recommended.
A trust is an arrangement that allows a trustee to hold assets on behalf of one’s heirs. Assets are placed in the trust and then, upon one’s death, the trustee will distribute them to the designated beneficiaries per the terms of the trust. A trust is far more difficult to challenge than a will, and having one in place can prevent one’s estate from being held up in probate court before it is administered. Those who choose to create trusts need to make sure they are properly funded and updated as necessary.
So, should New Jersey residents have wills, trusts or both? Some people may be fine with just a will, but there are others whose beneficiaries would best benefit if they had both. There are a number of factors that go into deciding which estate planning documents one should have. Legal counsel can help one determine what is needed and assist one is setting up an estate plan that makes the most sense.