A trust is a legal arrangement or instrument through which an individual, called the grantor, transfers property to another individual or entity that will have fiduciary obligations for it. The obligated party, called the trustee, administers the trust on behalf of the person who created it or for specified beneficiaries.
When planning your estate, it may be worthwhile to engage a lawyer who can help you evaluate the types of trusts in Manalapan Township to best determine how your assets will be dispersed upon your death. Choosing how to structure your trust will depend on the assets you include, the purpose for creating the trust, and the individuals you want to benefit.
Creating a Valid Trust
Trusts can be valuable tools to ensure that one’s assets are adequately protected upon the owner’s death. To meet the state’s legal requirements, a trust is considered valid only if the person creating it demonstrates:
- Capacity to create a trust
- Intention to create a trust
- Identification of a beneficiary
- Duties for the trustee
For a trust to be valid, it is also crucial that the trustee is not the sole beneficiary of the trust.
Two major categories of trusts in Manalapan Township are revocable trusts and irrevocable trusts. When a grantor creates a revocable trust, they reserve the right to change the trust’s provisions or terms after it takes effect, including complete revocation. Any will that becomes effective only after the grantor dies, called a testamentary trust, is inherently revocable. The grantor can modify it or revoke it as long as they are alive. For property tax purposes, the grantor is considered the owner of the assets.
In an irrevocable trust, the grantor waives all rights to any property they include within the trust. Irrevocable trusts are a useful tool for protecting assets from potential creditors and decreasing the amount of estate tax. Because the grantor may no longer modify, terminate, or change the trust conditions, the beneficiaries are considered to be the owners with regard to property tax provisions.
Trust Options Under New Jersey Law
Trusts are often an effective choice for estate planning because they offer a certain level of privacy that is not available when assets must pass through probate. While the property defined in a will becomes public record once it is probated, the contents of trusts remain private. Trusts are also harder to contest than wills, creating more security for the grantor and beneficiaries. Some of the popular types of trusts in Manalapan Township include the following.
A person may want to create a charitable trust to advance educational or religious pursuits, promote health or governmental purposes, relieve poverty, or benefit the community. If the terms of the trust do not specify a particular beneficiary or charitable purpose, the probate court may identify one or more purposes or beneficiaries that are consistent with the grantor’s intention.
Trusts for Animal Care
An individual may create a trust to provide the funds to care for an animal that was alive during their lifetime. This type of trust will terminate when the specified animal dies or, in the case of a trust benefitting more than one animal, when the last surviving animal dies.
Special Needs Trusts
A special needs trust may benefit a protected person, defined as someone who is disabled. A special needs trustee has broad discretion for determining when and whether to distribute trust assets in good faith, but the trustee cannot have any obligation to fund support for the named beneficiary. Another requirement of a special needs trust is that it must prove that the grantor intended to supplement the government assistance for which the protected person is eligible rather than replace or impair it.
A Manalapan Township Attorney Could Help You Choose the Appropriate Type of Trust
Given how hard you have worked to accumulate your personal assets and property, it is only natural that you would want to dictate what happens to them upon your death.
Identifying which trust vehicles are most suitable for your purposes can be a challenge, given the complex state laws that govern them. Hiring an experienced lawyer could provide an opportunity to explore the types of trusts in Manalapan Township and learn which ones will afford your beneficiaries the most security. Call today to learn more about your options.