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Revocable Living Trusts in New Jersey: Things You Need to Know
Are you wondering how to control your property and assets while still alive and determine how they will be distributed after death? Getting a revocable living trust is the perfect way to go.
A revocable living trust is created by a 1ettler, who can appoint themselves as the trustee, which means they have control over the trust property. The 1ettler can also revoke or change the terms of the trust at any time.
If you are a resident of New Jersey, there are some specific things you need to know about setting up a revocable living trust.
Why You Need a Living trust in New Jersey?
One of the main benefits of a revocable living trust is that it can help you avoid probate—a usually lengthy and tiresome legal process of distributing a person's properties after death.
If you die without a living trust, your assets will go through probate and be distributed according to state law. It can be expensive and time-consuming and may mean that your assets will not be distributed as you intended.
Yet, it is vital to note that New Jersey is one of the states that has fully adopted the Uniform Probate Code, a law that streamlines the probate process. In other words, probate in New Jersey might be more convenient, but having a living trust is as good as this simplified probate process.
Another benefit of a revocable living trust is that it acts as an alternative asset management tool if you become incapacitated and cannot make financial or medical decisions yourself. The successor trustee appointed in the trust can step in and make those decisions for you.
Are Wills Necessary if You Create a Living Trust in New Jersey?
Although a living trust is established to prevent the need for creating a will, you still require one. The two reasons you may consider writing a will are:
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Assigning guardianship for minors- You can't use your trust to name legal custody of any children in your life. And a will can usually take care of this just pretty fine.
Providing extra clarity and protection- Additionally, even when all assets are held by trusts, having an additional legacy plan secured with wills gives added clarity and peace of mind in the event of unforeseen circumstances.
Can a Living Trust Lower Estate Tax in New Jersey?
A living trust may not be your answer when it comes to reducing estate taxes in New Jersey. The federal estate tax is only imposed on estates worth almost $12 million, and since 2018 the state of New Jersey no longer collects estate tax but still collects inheritance taxes.
So unless you or combined with your partner or spouse have an estate close to $24 million, more complex trusts such as AB trust might help reduce or even avoid this kind of taxation.
Creating a Revocable Living Trust in New Jersey
Usually, specific requirements must be met to create a valid revocable living trust in New Jersey, including.
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The settlor must be at least 18 years old and of sound mind.
The settlor must have the capacity to own property.
The settlor must intend to create a valid trust under New Jersey law.
Once the settlor meets these requirements, they can proceed by deciding whether the trust will be individual or shared. Afterward, they must identify the specific properties to include in the trust. It is also essential to determine the successor trustee and name the beneficiaries. And the document will only become legal after being notarized.
Of course, this whole process can only get simpler if you know where to begin. That is why if you want to create a revocable living trust in New Jersey, Forms.legal will assist. We offer printable forms that come as free PDFs, and all you have to do is fill the forms available on this site.