New Jersey Trust Law
Drafting Trusts: An Overview
A trust is a legal document that holds property gifted from one person to another. The trustee is the gifter of the legal property, and the beneficiary is the recipient. The settlor is the person charged with the creation of the trust. The NJ 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 important 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 and are given the opportunity to name who will handle all assets if you are unable to do so yourself. For those reasons, trusts are often preferable to willing certain aspects to 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 type of trust in more detail.
- Living Trusts: Created while the trustee is alive, living trusts allow all parties to avoid the probate process.
- Testamentary Trusts: Trusts created through wills that are required to go through the probate process.
- Revocable Trust: Trusts that can be voided by the trustee at any time and for any reason.
- Irrevocable Trust: Trusts that are prohibited from any change or voiding for any reason by any party.
- 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.
- Your trust must include a written declaration of the intent of the document.
- As part of the trust, you must sign over all deeds for any property or asset gifted to an individual through the trust.
- Your trust must include a minimum of one beneficiary to be legally valid.
Contact our New Jersey Trust Law Today
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. Call (908) 561-5577 or contact us online to get started on your trust today.