Bergen County Trust Lawyer

A trust is essentially a legal contract between three parties: the trustee, the grantor, and the beneficiary, and they serve as a useful tool to protect assets, reap tax benefits, and, in some cases, avoid probate. To learn more about trusts, or if you’re interested in creating a trust, please don’t hesitate to contact a knowledgeable Bergen County estate planning lawyer from The Law Offices of Colin M. Quinn today.

Trust Lawyer | Here to Help Preserve Your Legacy

Protecting and preserving your assets for future generations is a crucial part of estate planning, and one of the best ways to do this is through setting up a trust. For skilled guidance, reach out to a Bergen County trust lawyer from our legal team.

Basic Components of a Trust

A trust will have three basic components: the trustee, the grantor, and the beneficiary. A brief outline of these components is as follows:

• Grantor: The grantor is the person who creates the trust, and the person whose assets are being placed in the trust.
• Beneficiary: The beneficiary is the person or entity who will eventually receive assets held within the trust.
• Trustee: The trustee is the person who is in charge of managing assets held within the trust and ensuring they are properly distributed to the beneficiary with the time comes.

Revocable Vs. Irrevocable Trusts

A revocable trust, also known as a living trust, allows the grantor to retain control over the assets and make changes or revoke the trust entirely during their lifetime. This flexibility is appealing for many, as it provides the grantor with the ability to adjust their estate plans as life circumstances change. However, the assets in a revocable trust are considered part of the grantor’s taxable estate, which may have implications for estate taxes upon their death.

Conversely, an irrevocable trust is one that, once established, cannot be altered or revoked by the grantor. This type of trust effectively removes the assets from the grantor’s estate, potentially offering benefits such as protection from creditors and reducing estate taxes. While the irrevocable trust offers significant advantages in terms of asset protection and tax planning, it requires the grantor to relinquish control over the assets once the trust is created.

The choice between a revocable and irrevocable trust depends on individual circumstances, including estate size, tax considerations, and the desire for control over assets.

Other Types of Trusts in New Jersey

There are many other types of trusts that a person may create, depending on their specific wishes and needs. Some examples include the following:

• Special Needs Trusts: Designed to provide for the needs of a disabled beneficiary without disqualifying them from receiving government assistance.
• Charitable Planning Trusts: Allows for a portion of the estate to be donated to charity, potentially offering tax benefits while supporting philanthropic goals.
• Irrevocable Life Insurance Trusts (ILITs): Holds a life insurance policy within a trust, offering potential estate tax benefits and ensuring the policy proceeds are distributed according to the grantor’s wishes.
• Asset Protection Trusts: Aimed at protecting assets from creditors, lawsuits, or other claims. These trusts must be irrevocable to provide the intended protection.
• Spendthrift Trusts: Protects the beneficiary’s inheritance from their own potentially irresponsible spending and creditors by controlling the distribution of assets.

Administering a Trust in New Jersey

The process of administering a trust isn’t always straightforward, and if you’ve been appointed as a trustee, you should strongly consider hiring a trust lawyer to walk you through it. A brief overview of the trust administration process in New Jersey is as follows:

1. As per New Jersey law, trustees must inform beneficiaries about the trust and their right to request a copy of the trust document.
2. Compile a detailed list of the trust’s assets and, if necessary, have them appraised to determine their value.
3. Settle any debts owed by the trust as well as any estate or inheritance taxes due.
4. Trusts often require the filing of specific tax returns. Trustees should prepare and file these in a timely manner.
5. According to the terms of the trust, distribute the assets to the beneficiaries.
6. Once all assets have been distributed, and all duties completed, formally close the trust.

Contact a Trust Lawyer Today

If you have further questions about trusts or you’re looking to create one, please don’t hesitate to contact a trust lawyer from The Law Offices of Colin M. Quinn today. We are here to effectively represent your interests, every step of the way.