A person who creates a trust is known as a “grantor” or “donor” while the person who is appointed to administer the trust is known as a “trustee.” While having a trustee can help you execute decisions about your estate according to your wishes, many people are concerned about losing control over their assets during their lifetime. For this reason, many people opt to create revocable trusts, which offers grantors much more flexibility.
As the grantor, having a revocable trust means you will be able to make changes or revoke the trust completely whenever you choose to do so. This means the assets you put into your revocable trust will remain in your estate throughout your lifetime. It also means that the principal of the trust, called the “Corpus,” will remain subject to the claims of creditors and will not be protected if you later make a Medicaid application. To learn more about whether a revocable trust is right for you and how you can come up with an effective plan, you should seek the guidance of an experienced estate planning attorney.
Reasons Not to Create a Revocable Trust
- Revocable trusts are popular in states that have unfriendly probate laws, like Florida. Trusts are used to avoid the expensive and time-consuming probate proceedings. Because New Jersey’s probate law does not require going to court except for major issues, avoiding probate is not a reason to create a revocable trust.
Reasons to Create A Revocable Trust
Apart from offering you the flexibility of making changes and the ability to revoke your trust, creating a revocable trusts offers several other benefits:
- Avoiding probate
Unlike a will, trusts are privately held in the responsibility of the trustee. This means that trusts are not subject to the probate process upon the grantor’s death, and that your trustee and beneficiaries can proceed with administering your estate without spending time and money seeking court supervision. If you have real property in states like Florida, New York and California, which do not have friendly probate laws, it may be a good idea to establish a revocable trust and transfer the out-of-state property it. The savings of time, money and aggravation will most likely be worth it.
- Because a revocable trust is a non-public document, your trust will not become a public record. This means that the only people who will have access to the terms stated in your trust will be your trustee and beneficiaries. If privacy is important to you, consideration should be given to a living trust.
- Granting your Trustee the Ability to Manage Your Assets
As the grantor, whoever you appoint as your trustee will have the authority to administer your trust property and eventually distribute it to your beneficiaries. This is particularly useful if you should become physically or mentally incapacitated.
- Trusts are particularly suited to individuals who are not married, have no children and do not want to have the burden of handling their own finances. The establishment of a trust transfers ownership of the trust assets to the trustee, who is not subject to some of the roadblocks that financial institutions create for agents under a power of attorney.
Discuss Your Goals with An Experienced Trust Lawyer
If you would like to learn more about how creating a Revocable Trust, contact us online or call 973-208-2900. Our office in Riverdale is handicap-accessible and has adequate off-street parking. We are available during regular business hours and are convenient to NJ Route 23 and Route I-287.
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