Creating Strong Trusts in New Jersey and New York
Living trusts are trusts that start to function while you are alive. They come in many forms, including revocable living trusts and irrevocable living trusts. A revocable living trust allows you to make changes to the trust and (as the name implies) revoke it. It is an effective instrument to avoid probate. However, New Jersey has a very simple probate process. There are other kinds of living trusts — irrevocable trusts — that are more beneficial for tax purposes and that help take care of people with disabilities by protecting their assets from catastrophic medical expenses. At The Manna Helmy Law Group, our lawyers understand the many creative uses of living trusts and other estate planning options available to our clients. We will help you form an estate plan that protects your assets and minimizes tax liability.
Minimizing Taxes Through Irrevocable Living Trusts
Many assets you own are considered taxable assets of your estate. For example, upon your death, your life insurance death benefit will be taxed as though it was cash. An irrevocable trust can be set up so that the trust is the owner and the beneficiary of the life insurance policy and not a person. In so doing, the life insurance will not be subject to income tax or estate taxes in your estate or that of your loved one.
Irrevocable Living Trusts and Medicaid
The federal Medicaid program is only available to low-income, low net-worth Americans. This program is designed to pay for nursing home, medical and prescription costs, which can be staggering. In order to legally qualify for this program, you can give your assets away to loved ones or to a trust and, after five years, avoid any penalties for having done so. The irrevocable trust would own your assets and remain in existence until your death. While you would not be legally entitled to a penny from the trust, the trustee (your children or another trusted individual) could use the trust money to augment your Medicaid benefits and pay your living expenses. There is a five-year penalty for setting up a revocable living trust. Therefore, this option is most effective for forward-looking individuals.
Benefits of Hiring a Trust Attorney Across Ridgewood, NJ & Beyond
- Assistance Establishing a Living Trust: Setting up a trust is far more complicated than setting up a will. A living trust starts to function while you are alive, while wills don’t until after someone has passed. Our trust attorneys will work with you diligently to ensure your trust encompasses all assets needed.
- Help Select a Trustee: When you create a trust, you need to appoint a trustee. The trustee is the person you’re appointing to monitor and manage the funds in the trust. In the occurrence of an unfortunate event, a trustee will manage and handle all assets in the trust. The trustee should be someone responsible and someone you know well. If you are still unsure, our trust attorneys can help you appoint a trustee.
- Trust Attorney Can Explain Differences: Our knowledgeable trust attorneys know all the differences between trusts, wills, power of attorney, and other documents. As you consider your estate planning options, there are a number of questions that you’ll need to entertain. It’s important to have a trusted legal ally who can offer strategic clarity. This is where trust attorneys come in.
- Keep Trusts Up to Date: Don’t set up your trust and forget about it. Our trust attorneys recommend that you review your trust or estate plan annually to ensure that if changes have occurred, they are recorded in the plan.
Contact Us to Learn More and Start Protecting Your Assets
For more information about how a revocable or an irrevocable living trust can benefit you, speak with us. Contact our living trust attorneys online or call our Ridgewood office at 201-345-3018 to schedule a free initial consultation to discuss your situation. We represent clients throughout New Jersey and New York.