A trust is a financial instrument containing specific instructions regarding how the assets of one individual are to be managed for the benefit of another. The creator of the trust, the settlor, finances the trust and the trust administrator, the trustee, invests the assets and manages the account. Anyone who receives funds from the trust would be called a beneficiary.
Whether you are seeking to use your trust as an investment vehicle for your family or if you desire to preserve benefits commonly enjoyed by the public, a trust administration lawyer in Manalapan Township could help. There are many elements to consider when forming a trust, but a trusts attorney could help guide you through the trust formation process.
Commonly Used Trust Instruments
Trusts instruments come in many different forms and can be used for a variety of long-term planning purposes. However, some trust forms are more common than others.
A revocable trust, more commonly referred to as a living trust, is created during the lifetime of the beneficiary. This trust allows the settlor to designate assets in the present moment rather than under the terms of a will after death. The main advantage of establishing a revocable trust is to avoid probate court. With an experienced trust administration lawyer in Manalapan Township, a living trust may be able to pass assets to heirs without ever being in probate.
An Irrevocable Trust is impossible to revoke. Once an asset is transferred into the trust, there is no removing it. The transfer may also remove the asset from the taxable estate, meaning that there may be significant tax benefits and protection from creditors if they are looking for assets to repossess or foreclose.
Charitable trusts are frequently established by high net worth individuals seeking to reduce the value of their estate taxes. Typically this is to avoid substantial capital gains taxes on assets they own. In addition to being irrevocable, the IRS states that these instruments are not automatically tax-exempt. An organizational test is used to determine whether the trust is free from tax as a charitable organization. Charitable trusts are a great financial tool for many wealthier individuals, but these complex instruments require a great deal of consideration. Retaining a reliable Manalapan Township trust administration lawyer could help ensure your community receives the gift you desire.
Special Needs Trust
This instrument is designed to safeguard assets for a person receiving government benefits resulting from a disability or need. These instruments are especially beneficial for those who have received a court settlement and wish to use these assets without being disqualified as an individual eligible for government assistance programs. Similarly, this instrument may be available when the individual’s family wants to provide support in addition to what the government has offered.
Choosing the Best Course of Action
When it comes to creating or enforcing a trust, a Manalapan Township trust administration lawyer could provide essential counsel and if necessary, litigate on your behalf. An attorney could guide you through the legal process ahead and discuss all the resources available to make the best decision for your situation. We have the experience to explain sophisticated planning techniques clearly and concisely. Contact us today to discuss how a trust could help manage your assets.