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Drafting Trusts: An Overview
A trust is a legal document that holds property gifted from one person to another. The trustee is the giver of the legal property, and the beneficiary is the recipient. The settlor is the person charged with the creation of the trust. The New Jersey estate lawyers at Aiello, Harris, Abate Law Group PC can explain the unique characteristics of a trust and help decide if you should draw up a document for your assets.
Advantages of Trusts
The main advantage of holding specific assets or property for a beneficiary in a living trust (by far the most common trust created) is that it does not require a probate process.
Additionally, the trust document is not required to be made public — which is essential for many. Lastly (with all types of trusts), you are given the ability to name alternative beneficiaries in the event of the death of the primary recipient. You are allowed to name who will handle all assets if you cannot do so yourself. For those reasons, trusts are often preferable to wills concerning certain aspects for friends and families.
Types of Trusts
There are five types of legally recognized trusts. The experts at Aiello, Harris, Abate Law Group PC can explain the unique characteristics of each kind of trust in more detail.
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- Living Trusts: Created while the trustee is alive, living trusts allow all parties to avoid the probate process.
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- Testamentary Trusts: Trusts created through wills that are required to go through the probate process.
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- Revocable Trust: A trust that the trustee can void at any time and for any reason.
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- Irrevocable Trust: Trusts that are prohibited from any change or voiding for any reason by any party.
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- Spendthrift Trust: Trusts that prohibit beneficiaries or creditors from accessing the contents of the trust before a specified time.
As with most things, there is significant overlap between the five types of trusts. One important factor to note is that all trusts immediately become irrevocable after the death of the trustee.
Requirement of Trusts
As with all legal documents, there are certain legal requirements for trusts. Here are the three requirements of all trust documents.
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- Your trust must include a written declaration of the intent of the document.
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- As part of the trust, you must sign over all deeds for any property or asset gifted to an individual through the trust.
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- Your trust must include a minimum of one beneficiary to be legally valid.
A Trust Consultation
Given the tax and legal requirements of trust creation and execution, hiring an experienced estate lawyer from Aiello, Harris, Abate Law Group PC is the simplest way to prevent the mismanagement of your assets.
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Call us today at (908) 561-5577 or contact us. Your initial consultation will take place over the phone, and you can schedule an appointment at one of our office locations across New Jersey.
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