The estate planning process is to be able to pass on your legacy to future generations. One key way to do that is by preserving the value of the assets that you've amassed during your lifetime. While many think that the best way to do this is by placing their funds in an offshore bank account, setting up a Delaware trust can afford you similar benefits and peace of mind.
In case you're wondering why you should set up a trust in Delaware as opposed to New Jersey, that's because the former offers some of the most favorable laws for preserve your assets while keeping your tax burden low. By setting up a Delaware trust, you're afforded a degree of anonymity that you may not enjoy elsewhere as well.
There are many reasons that individuals of means including Middlesex business owners and professionals set up this type of trust.
One of the primary reasons that they do it is to avoid having to pay exorbitant taxes when passing on their assets to their heirs. Unless they're placed into a trust, then the corporation, limited liability company or partnership that you own may have to pay property taxes on the property as it passes from one generation to the next.
A great benefit associated with setting up a Delaware trust is that the administrative process for doing it is fairly streamlined. It doesn't have to be submitted to any part for approval and there's no one to oversee the relationship between the beneficiaries and trustee. Living trusts don't have to be filed with a clerk either. This can result in reduced court fees.
Unlike other states, in Delaware, it's not necessary for you to use a particular format or certain terminology when drafting your trust document. It doesn't have to be written in English either.
One requirement that the state does have though is that at least one of the trustees, trust companies or corporation managing it must be a resident of or registered in Delaware.
There are different steps you can take if you're looking to legally protect your estate assets so that your legacy can live on for future generations. It's never too early to sit down with an asset protection planning attorney to discuss your unique situation and different types of trusts or corporate structures that may best preserve your wealth.