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Phone: 201-345-3018

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Asset protection requires proper funding of trusts

Taking a proactive approach to estate planning is a great way to get started. Those in New Jersey who are able to address these matters far in advance of their eventual implementation are at an advantage, as last-minute planning often yields poor results. However, in order to harness the full potential of asset protection tools such as trusts, those vehicles must be properly funded.

A revocable trust is an especially flexible asset protection tool, when correctly implemented. In order to reap the full benefits of such a trust, individuals must carefully determine what goals they are trying to achieve from the onset. For many, the savings associated with placing assets in a revocable trust is the priority. Others focus on the ability to keep their financial matters private after they have passed. For many, however, the primary value of a revocable trust is the ability to distribute one's accumulated wealth in whatever way desired.

In order for a revocable trust to be valid, it has to be properly funded; this means that the assets that an individual wishes to include within the trust have to be transferred into that vehicle. This process involves ceding personal ownership of those assets, which will become the property of the trust itself. This requires that some assets, such as real or personal property, be re-titled to show the trust as the new owner. Investment accounts must be altered to list the trust as the owner. In addition, any benefits that an individual wants to include in the trust must be included by means of listing the trust as the beneficiary in the event of death.

For those in New Jersey who are interested in learning more, it is worth the time and expense to schedule a consultation with an estate planning attorney to discuss whether a revocable trust offers the right fit. During this meeting, the pros and cons of this asset protection tool will be reviewed, as well as additional details on how to customize the trust to fit specific needs. This particular estate-planning tool offers benefits that are realized during one's life, as well as giving a lasting gift to those who will be left behind.

Source: wraltechwire.com, "'It ain't over 'til it's over' - Use of a funded revocable trust in estate planning", John R. Sloan, Nov. 26, 2014

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