New Jersey residents who are preparing their estate plans may think that they do not need a trust for their children. They might think of trusts as something that is only suitable for wealthy families or spoiled kids. However, a trust can be a useful vehicle for managing how distributions are made.
There are other ways of passing assets down to heirs. Most people are familiar with wills, and these documents can also be used to name guardians for minor children among other things. Retirement accounts, life insurance policies and similar assets can be passed down quickly and easily by filling out a beneficiary designation form. For property such as real estate and vehicles, an heir can be added to the title with rights of survivorship. Beneficiary designations and titles override what is written in a will.
With a trust, a parent could make a condition that a child does not receive the money until reaching a certain age. The trust might carefully manage how a child who is bad with money receives distributions. Trusts also have the advantage of being private. They do not pass through a public probate system like a will does.
An attorney can assist parents in the creation of an estate plan that will protect their children. One important point to keep in mind is that the estate plan will change over time. Children will grow up, marry and have children of their own. Estate plan documents should be reviewed every few years and after major life changes to adjust to changes in assets and family, and an attorney can be of assistance in so doing.