What Is A Trust?
Think of a trust as a basket that can hold assets such as real estate, securities, life insurance, and money for the benefit of the beneficiaries. Although the trustee of the trust controls the basket and the property that is added to or removed from the basket, the trustee must follow the directives you as the maker set forth in the terms of the trust.
Various types of trusts exist under New Jersey law, but the easiest way I like to break them down for my clients at Katkocin Law Office is into two general categories:
Living trusts, sometimes called "inter vivos trusts"
Testamentary trusts, which are trusts contained in a Last Will and Testament
Living trusts can be either revocable or irrevocable. As the names imply, the maker of a revocable living trust can revoke the trust while he is still alive and has the requisite mental capacity; however, the maker of an irrevocable living trust generally may not revoke the trust.
A testamentary trust becomes irrevocable upon the testator's death. As your lawyer, I can help you determine what the best situation is given your particular circumstances.
Why Create A Trust?
Trusts can serve many purposes. They can reduce or eliminate estate taxes and allow for gifts to minors or adults who may not be accustomed to the proper handling of a lump sum of money.
A common misconception is that one uses a living trust to avoid estate taxes, whereas in reality the specific trust provisions, whether they are contained in a living trust or in a testamentary trust, are what can reduce or avoid estate taxes.
Contact Katkocin Law Office
Call my Medford office at (609) 953-2000 or contact me online for a free telephone consultation. I am an attorney who offers highly individualized service to suit your particular situation.