When considering the most appropriate option for protecting your assets and clearly outlining your wishes, we recommend a revocable living trust New Jersey families rely on from Klenk Law. There are several estate planning options available. When choosing the right type of trust for you and your family, you will want to have confidence in knowing that you have made the best possible decision. Meeting with our team at Klenk Law will be critical in answering your many questions. We assist you in making the best decision for your needs.
Believing trusts are only for the wealthy elite is a common misconception. However, this is far from the truth. A revocable living trust is a trust created in your lifetime. You can easily update and change the trust. Typically, trusts involve three parties, the grantor (you), the trustee, and the beneficiaries. With a revocable trust, you can be all three. A trustee carries a significant responsibility but is primarily responsible for managing property and assets for heirs. Typically a trust will only become irrevocable when the grantor passes away.
The primary difference between a revocable and irrevocable living trust are the terms at which you can make changes. A revocable living trust allows the grantor to make changes during their lifetime. Typically, an irrevocable living trust cannot be easily changed.
Revocable living trusts provide a variety of benefits for both you and your family. They help avoid probate. Because the trust owns the asset, not you, filing a will is unnecessary. Instead, the trust dictates who inherits. Other reasons to consider a trust include:
Help to avoid the need for guardianship should you become incapacitated.
Allows for more privacy when you pass away.
Ensures a smooth transition of assets.
The appointed trustee will hold significant responsibility. While fit and able, you can serve as the trustee. The trustee oversees trust assets and their use. This could be over a long period of time, including when you are incapacitated. Because of this, choose someone you can trust. Further, someone who is committed to this role. Most often, the trustee is a trusted family member or friend. But, you can also select a financial institution.
One of the biggest fears people have is losing control of their assets when they place them into a revocable living trust. However, as the grantor of the trust, you can still retain full control. The trust can be set up to allow you to act as both the trustee and beneficiary during your lifetime, allowing you to make changes as needed. It’s not until you pass away or become incapacitated that your successor trustee will step in.
When you have questions about revocable living trusts, look no further than Klenk Law. We understand the amount of pressure you may feel about protecting your assets and your estate and know that you want to do everything you can to make this process go smoothly for your loved ones. When it comes to revocable living trusts, there will typically be three parties involved.
The Grantor: The grantor, also known as the trustor or the settlor, is the person who created the trust in the first place. Typically, there is one person with the title of “grantor.” That said, married couples may choose to create a trust together.
The Trustee: The trustee of a trust is the person who is responsible for managing property and assets specified in the trust. Often, the grantor will name him or herself as the trustee while they are alive and pass on this title to another person when they die. The person who receives this title once the first trustee has passed away is the “successor trustee.”
The Beneficiaries: The trustor can name one or more people as a beneficiary to the trust. If the grantor decides to name themselves a beneficiary while still alive, they can receive income from the trust. When they pass away, other parties will fall into a beneficiary role, such as the grantor’s children.
As noted above, it is possible to make changes to a revocable living trust. While the grantor is still alive, they have the power to do this. For example, if the grantor has significant life changes, like getting divorced, remarried, or having children, they may choose to change parts of their trust. When the grantor dies, though, changes cannot typically be made to the trust.
When a person creates a revocable living trust, they will usually save money when it comes to expenses related to probate. Further, when the grantor dies, their property can often be quickly transferred to the beneficiaries without needing to wait too long. While there are many advantages to having a revocable living trust, it is not a substitute for a will. It can often be very advantageous for the grantor to create a will if they forget to name property in their revocable living trust.
A trust may seem like a fairly straight-forward document; simple errors can interfere and potentially invalidate what would have otherwise been a smooth transfer of property and assets. We have seen how mistakes can be made regarding a trust. We encourage anyone considering updating or creating a trust to speak with a lawyer so their best interests can be protected. Here are a few of the most common mistakes that people can make, particularly if they are not receiving guidance from a lawyer for revocable living trusts in New Jersey:
The courts are protective of individual property rights. So enough affirmative proof of intent must be provided. The person granting assets has to show that this request is intentional and specific. If this is not done, then the trust may not be considered a valid document.
A trust cannot be created unless the property changes hands, referred to as “funding the trust.” Failing to transfer the property or failing to place it into the trust may result in the trust not having sufficient assets to carry out your wishes. The most common circumstances where a trust has failed were funding issues. This is where a person did not transfer the asset or deliver it into a proper trust.
Ensuring that the wording you use in your estate plan documents can make the difference between huge issues arising later on and having your assets dealt with smoothly and as you so wish. “Precatory” language is a wish or preference but does not establish affirmative duty or legal obligation. Precatory wording can be interpreted as more of a suggestion and less of an instruction. Being as direct and explicit as possible when writing your instructions helps eliminate confusion and increases the chances that your wishes will be honored.
When writing your trust, it is your beneficiaries or charities that are going to benefit ultimately. Specificity is required. This ensures your chosen loved ones or entities receive the assets. Planning can make sure names are not forgotten, misspelled, or inaccurate information is provided. A viable trust names beneficiaries and strict duties for the trustee to carry out.
A revocable trust is flexible, which is why it remains one of the most popular estate planning choices for individuals and families. As opposed to an irrevocable trust, assets held in a revocable trust can be added or removed at any time by the trustee. Because of this flexibility, most trustees are the person who initially created the trust.
Creating a revocable living trust in New Jersey takes some time and planning. You will almost certainly need a lawyer to help with the process. Once completed, you can feel peace of mind having completed your objectives. However, you might wonder whether or not your revocable living trust can be terminated.
A revocable living trust can be terminated at any time by the trustor while they are alive. If they pass, the ability to run the trust passes to the successor trustee. Some trustors will choose to have the trust automatically terminate when they die. There are benefits to choosing the option, and an estate planning lawyer can explain these.
When the trustor (creator of the trust), who is also the trustee (person who manages the trust), would like to terminate the trust, he or she can do so at any time. The process often includes the following:
When the trustor passes away, the revocable trust becomes irrevocable. It is essential to clarify with the investment institutions who now serves as the trustee.
Most people who choose to terminate a revocable living trust decide because the purpose or intention has been fulfilled. Often this intention is regarding the distribution of assets. That said, it is certainly possible to revoke a trust for other reasons, including:
Would you like to terminate your revocable living trust? Are you contemplating updating your plan? Please reach out to Klenk Law. We can help!
Many families are looking for a more private process after their passing. When a will passes through probate, the process becomes public, meaning anyone can access your estate’s contents. Developing a trust not only safeguards assets from probate it also ensures a private process. Protect your rights and assets with a revocable living trust established by our New Jersey revocable living trust lawyer; schedule an appointment with our team at Klenk Law today. We are happy to answer questions about Revocable Living Trust New Jersey.
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