Trusts are an estate planning tool and can include financial products like stocks and bonds or physical property such as land, jewelry, or cars. Trusts also have advantages for protecting your assets while you are alive and for passing on your property after you die.
A property trust is usually specifically identified as a revocable or an irrevocable trust. Both of these trusts may contain property, investments, family heirlooms and cash.
A revocable trust allows a person to add and remove property throughout their lifetime. You may remove property from a trust and return it to direct ownership to make it easier to sell. You can also take out family heirlooms and other personal effects so that you may pass it on to another family member. Revocable trusts may be abolished if they are no longer needed.
An irrevocable trust may not be abolished, and its assets cannot be removed. These trusts are used to shelter property that its current owner is not going to sell or need.
Trusts are an important part of estate and asset protection planning to assure that a person’s financial legacy is carried out in accordance with their instructions and wishes. Trusts also have benefits for a large and complex estate.
The appointment of a trustee to manage your trust after you die helps assure that your instructions are followed. You should appoint a trustworthy and competent trustee because they will have to distribute the trust to the correct beneficiaries. Money may be left to family members, charities, and other entities. You can direct who will receive physical property.
A property trust also helps avoid the cost, delay, and inconvenience of probate. Avoiding probate also allows beneficiaries to receive their inheritances sooner.
Trusts, however, do not protect assets from estate taxes. Individuals who do not have substantial assets may not need to undergo the time and expense of creating a trust.
You should also consider having a will if you have a trust. Trusts store property. Wills, however, directs your descendants on what you want done with your assets. Wills also perform the important function for parents by naming a guardian for minor children.
Attorneys can provide options on asset management and your estate. They can also assure that the proper documents are drafted for your plan which comply with New Jersey legal requirements