Most New Jersey residents are aware of the benefits of establishing one or more trusts. These flexible estate planning tools can help individuals protect assets from excessive taxation and can give families the ability to bypass probate. However, in order to access the full potential of any given trust, it is important to follow some simple guidelines.
For example, many individuals go through the process of establishing a revocable trust, only to fail to properly fund the vehicle. Trusts are only valid when they hold assets. While it may seem obvious that one would go through the motions of funding the trust that was created to meet their needs, it is not unusual to find trusts that were never properly funded and are therefore useless.
Another mistake lies in creating and funding a trust but then setting the matter aside from that point forward. As the years go by, situations change. As such, the estate planning solutions that were set into motion at one point in time may be poorly suited to meet the needs that arise years down the line. It is important to periodically review all trust documents to ensure that the provisions outlined within still represent one’s wishes.
For those in New Jersey who are willing to take the time to follow these pieces of advice, the power of trusts within estate planning simply cannot be overstated. As with any issue of significance, creating and maintaining a trust requires attention to detail and a willingness to revisit the matter as time goes by. Individuals and families should make an effort to ensure that the estate planning documents that are put into place are able to serve their intended purposes.
Source: CNBC, “Trust bust: Steer clear of the 8 biggest estate-planning mistakes“, Barry Glassman, Oct. 22, 2014