When people in New Jersey are creating an estate plan, they may want to use a living trust. A living trust allows a person to keep control of assets after placing them in the trust. Married people may place assets in a trust and name one another as co-trustees. With a trust, assets do not go through the public process of probate and can be distributed to beneficiaries without delay.
However, there are several common errors that people should be aware of. One of those errors is failing to fund the trust. Once the trust is created, legal titles must be changed so that they belong to the trust. This can mean changing the name on deeds and reregistering vehicle titles. Financial institutions may have their own processes for transferring an account into a trust.
Another error is failing to involve successor trustees at an early stage. Successor trustees should know a person’s plans for the trust and where the trust paperwork can be located. They should also become familiar with the assets. A person may want to introduce successor trustees to people at the relevant financial institutions. Giving a successor trustee financial power of attorney may allow the trustee to smoothly take over the running of the trust if the creator becomes incapacitated.
A person should carefully consider who the successor trustee should be based on the complexity of the trust and what is being asked of the trustee. For example, some trusts may require financial expertise and a significant amount of time to manage correctly. They can be complex enough that they are better handled by professionals instead of a friend or relative. If distributions to beneficiaries are left up to the discretion of the trustee, a person might want to pick someone who is good at conflict management. An attorney may be able to help with the process.