Each individual in New Jersey has specific and unique goals for their estate, both during his or her lifetime and after passing. When creating a plan for the future, it’s important to develop a strategy that allows you to protect assets and accomplish specific goals for the future. A careful evaluation of individual objectives can reveal which estate planning tools will be most effective in order to accomplish those goals.
One way to accomplish your specific estate planning objectives is by implementing trusts. These are important and effective tools, often used by individuals to set aside and protect assets for a specific use. There are different types of trusts, and it may be helpful to look at the different options available in order to determine which one is most likely to help you accomplish your goals.
Basic information about trusts
Trusts are incredibly useful tools, but there is often misunderstanding regarding how to best use them. Trusts function in different ways according to their type and purpose, but some of the most common include:
- Revocable or living trust
- Irrevocable life insurance trust
- Credit shelter trust
- Charitable remainder trust
- Special needs trust
- Spendthrift trust
- Asset protection trust
The grantor is the individual who creates the trust, and the trust operates as its own financial entity. With a revocable trust, it will be possible to move assets in and out of the trust and make changes as you see fit over the course of your lifetime. A trustee is the person who will oversee the trust, ensuring a proper management of the assets.
What can trusts do?
Trusts can allow you to accomplish specific objectives with your estate, whether you want to provide for a loved one, give money to charity or have another aim. Assets held in a trust do not go through probate, and a trust can allow you to provide for minor children and grandchildren in the future. Asset protection and estate taxes are also common reasons why someone may consider creating a trust.
If you are considering what your estate plan needs to be complete, you may want to learn more about the benefits a trust can provide for your specific situation. With the right estate planning tools, you can have confidence regarding your future financial interests.