Making a Living Trust Part of Your Estate Plan

Although your last will and testament should be the cornerstone of your estate plan, a living trust is an additional tool that can help with the transfer of your assets after you pass away and allow you control over those assets while you live.

A living trust is a form of revocable trust. You as the grantor transfer title of designated assets to the trust. You serve as the trustee and maintain control over those assets. You name a successor trustee who will take over the trust upon your death and distribute the assets to beneficiaries you have designated. Until then, you can manage this property without limitations and add or remove assets as you see fit. You can amend or revoke the trust at any time.

These are among the key benefits a living trust can offer:

• Simplifying or avoiding probate — The assets belonging to the trust can be distributed directly to the beneficiaries. Although the New Jersey probate process is relatively simple and inexpensive, it becomes still easier if the size of the estate is reduced.
• Continued control of assets — If you should become incapacitated, your successor trustee can take over management of your assets without the need for a durable power of attorney.
• Real estate — A living trust can hold title to real estate outside of New Jersey. Other states’ probate procedures may be less friendly, and ownership by the trust can avoid them.
• Distribution of assets without tax waivers — Assets in a living trust can pass directly to beneficiaries who may be subject to New Jersey inheritance tax after your death.
• Trusts for family members — A living trust can in turn create trusts that provide lifetime benefits to family members. This can be especially helpful for managing the assets of a child or a person who is mentally incapacitated.

There are a few drawbacks to using a living trust in estate planning. For one, the trust only controls its funded assets, so you should still have a will to direct the distribution of any other property. Funding the trust requires re-registration of title to its property and making other transfers of assets. The administrative costs of creating and maintaining a living trust are sometimes more than those for a making a will, but the benefits both to you and to your beneficiaries are more than worth the small cost difference.

At the Law Office of Kisha M. Hebbon, LLC in Somerset, New Jersey, we can help you create an effective living trust that carries out your objectives for managing and transferring your assets. Contact us online or call 732-873-6464 for a consultation.