When considering estate planning options, New Jersey families are confronted with a large volume of choices, the details of which can be confusing. For most people, estate planning comes down to a few simple goals: asset protection, the smooth transfer of wealth from one generation to the next and the lowest possible tax burden placed upon those assets. One tool that can help meet those goals involves the creation of a revocable living trust, or RLT.
An RLT is funded in the same way as many other types of trusts. Assets are placed within the trust by changing the title or other paperwork to reflect that the trust itself, and not the individuals controlling the trust, are the owners of each asset. An RLT can be funded with real estate, life insurance, investment accounts and other asset types.
One of the primary benefits of an RLT is ability to bypass the probate process. The act of going to court to handle the distribution of assets is stressful, expensive and lengthy. With an RLT, the trust is structured in such a way as to dictate the distribution of assets.
One of the other top benefits of an RLT is the power that is retained by the creators of the trust. Individuals can be as specific as they wish when determining how to distribute assets. Funds can be given to heirs at specific ages, or when an heir has reached a certain milestone in life, such as graduating from college or buying a home. It is even possible to set terms and conditions on the assets, such as requiring grandchildren to maintain a specified GPA in order to continue receiving monthly distributions.
For many in New Jersey, a revocable living trust is a good fit for their estate planning and asset protection needs. In creating such a trust, it is essential to have the assistance of a qualified professional. By working with a local estate planning attorney, families can ensure that they create a comprehensive estate plan that fits their needs. They will also gain the peace of mind that comes with knowing that their chosen attorney will be there to give their plan a periodic review and make and necessary changes.
Source: Entrepreneur, “Smart Estate Planning Tips for Entrepreneurs“, Mark J. Kohler, June 25, 2015