When creating an estate plan, many New Jersey residents are looking for a degree of flexibility. This is an important consideration, especially when the needs of various heirs are not the same. Having the ability to customize an estate plan to provide both asset protection and address the varying needs of one’s heirs is possible through the use of trusts.
Trusts are, at the most base level, one of the most flexible estate planning tools available. A trustee is named, and this is the individual who will be given the authority to decide when to issue payments to the beneficiaries of the trust. The guidelines for making these decisions can be clearly spelled out within the document. In fact, leaving clear instructions is the best way to make sure that one’s wishes are carried out as desired.
A trust can also lay out specific timelines or events that will bring about a payment from the trust. Examples include graduation from college, reaching one’s 25th birthday or the purchase of one’s first home. The possibilities are endless, giving the creator of the trust control over how the funds will be distributed and put to use.
Trusts are also excellent tools for asset protection. For example, property that is held within a trust is considered to be owned by the trust itself. The beneficiaries only hold a beneficial ownership in the property. Therefore, they can make no claim on the property, and neither can their creditors.
When considering various asset protection and estate planning strategies, New Jersey residents should understand the benefits offered by a revocable trust. As with any significant financial decision, having all of the facts is key to making a the best possible decision. A trust offers a great deal of flexibility and control over the ultimate distribution of one’s assets, which is why it remains a popular estate planning choice.
Source: Cincinnati.com, “Trusts remain useful tool in estate planning“, J. Brendan Ryan, Nov. 21, 2014