Hamilton Trusts Lawyer
Hamilton Trusts Lawyer
Though many people appreciate the basics and benefits of creating a will, fewer are familiar with trusts and how they play a powerful, effective role in estate planning. Unfortunately, trusts suffer from a reputation problem because of the common misconception that they are only for the wealthy. In truth, New Jersey’s Uniform Trust Code covers a wide array of situations and scenarios separate from financial considerations. Of course, when a statute is broad, you can expect complexities and challenges. Without guidance from a qualified legal professional, there can be errors in creating, executing, and managing the trust.
Estate planning is a core practice area at Scott Counsel, P.C., so you can rely on our attorneys to advise you on trust concepts and explain the advantages. We can also explain the various options and guide you in making informed decisions about how to structure a trust that achieves your goals. Trusts are not suitable for every family or situation, but they can deliver significant benefits as part of an overall estate planning strategy. Please contact our firm to schedule a consultation with a Hamilton trusts lawyer who will provide details. You might also find it useful to review some background information.
Basics of Trusts Under New Jersey Law
Understanding how trusts work starts by knowing the key roles in the trust document:
- Grantor: This is the person who creates the trust by signing the agreement and transferring property into it.
- Trustee: This party is tasked with managing the trust property according to the terms of the trust agreement.
- Beneficiaries: These are the people or parties entitled to distributions of income and principal, the terms of which are contained within the trust document.
Once signed by the parties and funded through property transfers by the grantor, the trust becomes its legal entity. Note that the grantor and trustee can be the same individual; this is often the case when creating certain types of trusts, described in more detail below. Depending on your circumstances, you might consider putting the following assets into a trust:
- Real estate, including your primary residence, vacation homes, and investment properties;
- Certain stock, investment, and retirement accounts;
- Bank accounts, including checking, savings, CDs, and other bank products;
- Business and partnership assets, when appropriate;
- Life insurance; and
- Many other types of real and personal property.
A special point on funding a trust is crucial because the trust does not exist as a legal entity until the property is transferred to the trustee. This is accomplished by changing ownership on assets that have an ownership document associated with them, such as a deed or title.
Types of Trusts in Estate Planning
Knowing the basics of trusts in New Jersey, you should also become familiar with the different types and how they work. A few options include:
- Testamentary v. Living Trusts: There are benefits of creating a living trust that takes effect during your lifetime, and you would typically list yourself as grantor and trustee when doing so. You might also consider establishing a testamentary trust via your will. This type becomes effective at your death, and your will operates to fund it.
- Revocable v. Irrevocable: As the terminology suggests, you have the option of creating a trust that you can modify or one that cannot be altered. An irrevocable trust is most often used to gain advantageous tax treatment since the assets are removed from the grantor’s net worth.
- Special Needs Trusts: Those who want to contribute to the care and support of a person with special needs can run into a conundrum: They could be increasing the disabled individual’s assets and/or income to the point that he or she does not qualify for government benefits. A special needs trust avoids this conflict.
Reasons to Consider Creating a Trust
The process of creating a trust is more involved than a basic estate plan, so you should understand why people opt for one:
- Privacy: Unlike a will that becomes a public record, the provisions of a trust are confidential. Your affairs are kept private, as are the interests of beneficiaries.
- Probate Matters: A living will be used to avoid probate if you also execute a “pour over” will. You create the trust and fund the trust during your lifetime, but you may not have transferred title to all assets before your passing. The pour-over will distribute property you own into the trust, so you own nothing or a nominal amount at death.
- Protecting Assets: Through an irrevocable trust, you maintain no control over trust assets and cannot change the terms. Besides the tax benefits mentioned above, you can take advantage of asset protection measures when trust property is not considered yours. Note that you cannot protect assets from creditors.
- Control: Whether through a living or testamentary trust, you maintain control over trust management after your passing. This may be useful considering beneficiaries who are young or not financially mature.
Legal Support with Trusts
The team at Scott Counsel, P.C. is committed to advising you through the trust creation process, starting with a thorough assessment of your circumstances, goals, and needs. Our Hamilton trusts attorneys will also:
- Guide you in determining an appropriate trust structure;
- Prepare a draft trust document;
- Review all terms and conditions to ensure you understand the arrangement;
- Handle details for signing all essential documentation;
- Assist with transferring property to the trust;
- Discuss modifications or amendments to a revocable trust if circumstances change or in the event of legal developments.
Contact a Hamilton Trusts Lawyer for Personalized Advice
While trusts may not be for everyone, this summary should help you gain a better understanding of how they work. It also sheds light on why retaining knowledgeable legal representation is essential when considering your options, executing the documents, and managing trust assets. If you would like additional information on creating a trust as part of your estate plan, please contact Scott Counsel, P.C. You can schedule a consultation by calling (856) 672-7248 or checking out our website. After reviewing your circumstances, our New Jersey trusts attorneys can get started on strategy.
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