Estate Planning With a Revocable Living Trust NJ
Discover how a revocable living trust in NJ can enhance your estate planning with insights from the Law Offices of Wenarsky and Goldstein, LLC. Call now.
Why You Need a Revocable Living Trust in New Jersey
Life can be unpredictable and full of surprises. One day, a person is here, and the next, they are not leaving their loved ones in the lurch. Some people have also woken up to discover that their valuable assets and finances have been lost or are under threat due to the actions of third parties.
Even though no one hopes to encounter such issues, the realities of life demand that we anticipate and take proactive steps to prevent them or mitigate their harsh effects where possible.
That is the goal of estate planning. Estate planning allows you to organize and protect your assets during your lifetime or in cases of incapacity and provide for your loved ones after death.
The Law Offices of Wenarsky and Goldstein, LLC, helps New Jersey residents evaluate whether a revocable living trust is the right fit for their estate plan.
With the use of certain legal tools or a combination of them, you can leave specific legally enforceable instructions about your estate or create legal arrangements to secure your assets for your benefit and that of your heirs.
A revocable living trust is one of those important tools. This type of trust allows you to appoint someone else or yourself to handle specific assets or your entire estate and specify who inherits them after you die. Legal guidance is crucial when establishing a revocable living trust as it involves complex legal requirements and considerations.
At the Law Offices of Wenarsky and Goldstein LLC, we understand your concerns about your future and that of your loved ones. As experienced estate planning attorneys in New Jersey, we can help you navigate these complexities and ensure your revocable living trust works as it should.
In this guide, we explain how revocable trusts work under New Jersey law and some of the legal requirements you might need to meet to get started. Please read on to learn more.
What Is a Revocable Living Trust?
A trust is a legal arrangement wherein a third party, or trustee, holds another’s assets on behalf of specific beneficiaries. The person who creates or funds the trust is called the settlor. They determine how the trust is structured and how the trust assets will be distributed to the beneficiaries.
A revocable living trust is one of the most common types of trusts. As the name implies, it can be altered or completely revoked by the settlor during their lifetime without any input from the trustee or beneficiaries. This controlling feature is what differentiates a revocable trust from an irrevocable living trust.
Both trusts have their benefits. However, if maintaining control over your assets while alive is a primary concern, a revocable living trust might best serve your purpose.
Benefits of a Revocable Living Trust
In addition to the control a revocable living trust affords you, this type of trust also offers other benefits, including the following:
Avoidance of Probate: Probate is a legal process through which the validity and authenticity of a will is established by a probate court before a deceased’s assets are distributed in the manner specified in the will.
The probate process could be complex and time-consuming, especially with large estates, and could cause hardship to the deceased’s beneficiaries. A revocable living trust allows you to avoid probate for your loved ones and grants them expedited access to your estate after your death.
Privacy Protection: Once a will is admitted to probate, it becomes public and can be scrutinized by anyone. As such, a will might not be the appropriate tool if you wish to manage the distribution of your estate privately. A revocable living trust is more appropriate since trusts are private documents.
Planning for Incapacity: You can serve as the trustee of your revocable living trust. But if you appoint a successor trustee in the trust document, your successor trustee can step in to help the trust should you become incapacitated, ensuring you and your beneficiaries receive uninterrupted financial support in your difficult moments.
Regrettably, a revocable living trust cannot shield your assets from the federal estate tax, which may be due after your death. So, if your estate planning goals include estate tax avoidance, you may be unable to achieve them with this estate planning document.
In such cases, you may need to consult an estate planning attorney who can help you consider your options and set up a comprehensive estate plan (with the appropriate tools) that aligns with your goals.
Common Misconceptions About Understanding Revocable Trusts
Estate planning through a revocable living trust protects certain beneficiaries differently than both a will and an irrevocable living trust. While New Jersey residents often assume complete control means asset protection, the trust document doesn’t shield property from creditors during your financial life.
The probate process remains relevant even with a trust in New Jersey. Though the legal vehicle helps avoid probate costs for most estates, a last will with durable power remains essential. This ensures a smooth transition of any bank and brokerage accounts or real property not properly transferred to the trust document.
Many advantages of trusts depend on proper funding. Simply having a successor trustee named doesn’t automatically transfer retirement accounts or life insurance policy benefits. The legal entity requires specific steps, often with a notary public, to assume control of estates worth protecting.
Family members and domestic partners should understand distinct advantages and limitations. While trusts provide protection for minor children without court approval, the uniform probate code still requires estates to pay taxes. Your attorney can help align these tools with your financial goals.
Life changes may require updating your trust document. A mentally incapacitated person benefits from having a successor trustee, but surviving spouse protections and inheritance tax implications need careful consideration. For New Jersey residents, maintaining privacy through avoiding public record remains one of the trust’s key benefits.
The financial life of your estate demands proper structuring. Real property, brokerage accounts, and other assets need strategic integration into the trust to ensure a smooth transition for certain beneficiaries.
How to Create an Effective Revocable Living Trust in New Jersey
Establishing an effective revocable living trust involves:
Identifying and Meeting the Legal Requirements
Revocable living trusts have to meet certain legal requirements to be valid and effective. They include the following:
- The settlor should be a mentally capable adult
- The settlor should demonstrate their intention to create a trust
- The trust should have a specific beneficiary or beneficiaries
- The trustee should be assigned duties to perform
- The same person should not be the sole trustee and sole beneficiary of the trust
- The trust document should be signed by the settlor and may be notarized for an added layer of authenticity.
You should consider these requirements and ensure that you can meet them before you create a revocable trust to avoid engaging in a futile exercise.
Drafting the Trust Document
The foundation of any trust is the trust document. This is where your specific instructions regarding your estate are detailed.
When drafting the trust, you need to ensure that your wishes are expressed clearly, without any ambiguity, so there’s no confusion about your wishes or intentions,
Funding the Trust
Funding the trust involves transferring assets to it. To achieve this, you’ll need to execute legal transfer documents in favor of the trust. Once that happens the trust is recognized as the legal owner of the assets, and the assets should be managed according to its terms.
However, because this is a revocable trust, you can change your mind anytime and revoke or terminate it. Legal ownership of the trust assets will revert to you upon revocation.
How to Revoke or Modify Your Revocable Living Trust
A New Jersey revocable living trust can be modified or revoked in the following ways:
- By following the method provided in the trust document (if any)
- By executing a subsequent will or codicil that expressly mentions the revocable trust or specifically transfers the trust property
- Any other writing that manifests the settlor’s intent to revoke or amend the trust.
Revoking or amending your trust abruptly could lead to new legal issues that could threaten your estate. So, it would be wise to consult a New Jersey Estate Planning Attorney before taking any step.
An estate planning lawyer can anticipate such complications and help you minimize or avoid them beforehand so your estate planning goals are not jeopardized.
How the Law Offices of Wenarsky and Goldstein, LLC Can Help
At the Law Offices of Wenarsky and Goldstein, LLC, we understand your concerns about your estate and the future of your beneficiaries. We also understand the intricacies of revocable trusts and estate planning.
As you take the bold step to plan your estate, we stand ready to guide you throughout the process to ensure your assets are organized according to your specific wishes and in the most legally beneficial way.
If you wish to incorporate a revocable living trust in your estate plan, we can help:
- Determine if a revocable living trust suits your estate planning goals
- Create the trust document and ensure it meets the required legal standards
- Amend the trust so it aligns with your current realities.
We pride ourselves on our ability to provide effective estate planning solutions for our clients’ peace of mind. We’d love the opportunity to do the same for you.
Contact Us Today for Help With Your Revocable Living Trust and Estate Planning Needs
A revocable living trust is a valuable estate planning tool that allows you to manage your assets during your lifetime and facilitate the seamless transfer of your estate to your designated beneficiaries.
Many legal complexities are involved in creating such trusts, which is why legal guidance is necessary for effective trust creation and comprehensive estate planning.
Estate planning is a huge component of our reputable practice at the Law Offices of Wenarsky and Goldstein. We are deeply familiar with the estate planning laws and the laws governing the creation of estate planning tools such as revocable living trusts. This places us in a good position to help you determine the most appropriate estate planning strategy for you.
Contact us if you’d like our help with estate planning or have questions about wills, estates, trusts, and guardianships in New Jersey. Let us work together to help you achieve your estate planning goals.
Frequently Asked Questions
1. Can I change my trust after I sign it?
Yes — a revocable living trust can be changed or canceled at any time while you are alive and mentally competent. You can add assets, remove them, or update your named trustee and beneficiaries as your life changes.
2. Does a revocable living trust protect assets from creditors in New Jersey?
No — because you keep control of the trust, New Jersey law treats those assets as still belonging to you. Creditors can still reach trust assets during your lifetime.
3. Who manages the trust if I become incapacitated?
Your named successor trustee steps in right away and manages assets on your behalf without court involvement. This is one key reason New Jersey residents choose a trust over a will alone.
4. Do I need to file a separate tax return for my revocable trust?
No separate return is required while you are alive. The IRS treats a revocable trust as part of your personal estate, so you report trust income on your own tax return.
5. What happens to my trust after I die?
Your successor trustee distributes assets to your beneficiaries based on the trust’s terms; no probate needed. This process is typically faster and more private than going through the New Jersey surrogate court.
Call the Law Office of Wenarsky & Goldstein
At the Law Offices of Wenarsky & Goldstein, LLC, our New York and New Jersey attorneys are experienced and knowledgeable in bankruptcy, estate planning and probate, guardianship, special needs planning, and real estate law. To learn more about how we can assist you with your legal needs, call us today at 973-453-2838.
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