New Jersey Trusts and Estates Attorneys
What is a Trust?
Trusts are important arrangements for those who wish to protect their assets, control their finances, and protect their legacy by providing for their loved ones. Additionally, many people choose to form trusts, because unlike a will, they are not a matter of public record.
Trusts may hold valuable assets such as cash, stocks, or real estate for the benefit of a person, or more than one person. They are created by a “settlor” for the benefit of a “beneficiary.” The person who manages the trust is called the “trustee.” In New Jersey, trusts commonly serve the purpose of providing for minors and to save taxes in passing the property by will to the next generation. They can also relieve individuals from the responsibilities of asset management and to isolate assets from creditors or spendthrift individuals.
There are many types of trusts that can be formed. Some of the more common types include:
- A Living Trust passes your assets to heirs without going through probate. Additionally, a living trust can ensure that your assets will be used for your benefit if you become incapacitated or are otherwise unable to manage your own affairs. A living trust occasionally is used to take the place of terms of a Will.
- A Revocable Trust allows the settlor to cancel the arrangement and reacquire the trust assets during the settlor’s lifetime.
- A Marital Deduction Trust is a trust established in a will to provide for a surviving spouse and to obtain the marital deduction available in calculating the federal estate tax on the testator’s estate.
- Credit Shelter Trusts are usually established by Will and can help you take advantage of tax exemptions.
- Charitable Remainder Annuity Trusts provide payments to a living beneficiary of a certain amount during a period of years, or a lifetime. After the period of time expires, the balance of the trust assets goes to charity. This type of trust can also function to save on income taxes.
- In a Generation Skipping Trust, the ultimate beneficiary is more than one generation younger than the trust’s creator. For example, this provides for trust assets to be distributed to grandchildren or later generations.
- A Grantor Reserved Income Trust is a way of making a delayed gift to the settlor’s beneficiaries at a discounted value.
- A Supplemental Needs Trust is a type of trust that can be created for a beneficiary who is mentally and/or physically disabled to provide for their care. It is intended to supplement government programs such as Medicaid, rather than diminish the benefits provided by those programs.
When forming a trust, a skilled attorney can help you determine what kind of trust is best for your family and financial situation. The attorneys at Hunziker, Champion, Romer & Miller are experienced in dealing with the creation of trusts. Call (973) 256-0456 or fill out our contact form for a consultation.
