Using Trusts in New Jersey to

 

·         Defeat Claims of Creditors

·         Keep Your Money from the Son or Daughter in Law You Can’t Stand

·         Protect Your Loved Ones

 

Are assets being distributed to your beneficiaries outright or in trust? 

If assets are distributed to a beneficiary outright, the beneficiary can do whatever he or she pleases with the assets. However, those assets are at risk from the beneficiary's creditors, spouse in a marital action, and poor judgment.

 

It is possible to create trusts that give the Trustee (who may also be a beneficiary) great flexibility in distributing the assets to the beneficiaries, and at the same time protects those assets from a beneficiary’s immaturity, misuse, creditors, divorce, etc. Also, trusts may be used when you want to direct how assets will pass upon the beneficiary's death. For instance, many times in a second marriage a trust in New Jersey will be established for the benefit of the spouse, but provide that upon the spouse's death the assets will pass back to the decedent's children. You should speak with Fredrick P. Niemann about the benefits and drawbacks of using a trust to distribute your assets to your beneficiaries.

 

If you currently have a trust established, are the trust terms still appropriate? 

Many people establish trusts for young beneficiaries. You should look at the ages when the assets will be distributed outright to the beneficiaries, keeping in mind that assets distributed to somebody who is 18 are likely to be spent differently than if distributed to a person who is 25 or 30 or older. It may be appropriate to increase or reduce the ages at which the beneficiaries will receive an outright distribution from the trust.

 

Alternatively, it may be appropriate to give the beneficiary an income stream, or give the Trustee greater discretion to make distributions from principal. For example, a trust might say that a child will receive the income from the trust starting at age 25, and that the principal must be distributed to the child outright at age 30 and 35. Prior to age 35, the trust principal could be used for the beneficiary pursuant to the terms of the trust. By structuring a trust this way, the beneficiary has an opportunity to learn how to manage money.

 

Do any of your beneficiaries have special needs?

If you have a beneficiary who is elderly or disabled, that beneficiary may need to qualify for public benefits in order to maintain their standard of living. If a person who is receiving public benefits receives an inheritance directly, the public benefits will cease, and the person must exhaust the inheritance to pay for the care that the public benefits would otherwise have provided for. Once the inheritance is exhausted, the person must then reapply for benefits. This can be a traumatic and expensive process. Instead, you should consider leaving assets in a purely discretionary Special Needs Trust for the person, drafted in such a way that it does not interfere with the person's ability to receive public benefits. By using this approach, the trust becomes a security blanket for the beneficiary, not a burden.

 

The use of a properly written New Jersey trust is a very good estate planning tool, but the beneficiary designations you name on your assets must be comparable with your trust objectives.  Not sure if your trust, will, or beneficiary designations are correct?  If you have any questions, contact Fredrick P. Niemann, Esq. at 888-800-7442, or fniemann@hnlawfirm.com. 

Trust attorney serving these New Jersey Counties:

 

Monmouth County, Ocean County, Essex County, Cape May County, Mercer
County, Middlesex County, Bergen County, Morris County, Burlington County, Union County, Somerset County, Hudson County, Passaic County

 

Trust Attorney In New Jersey | NJ Trust Attorney

New Jersey Trusts | Trust Accounts in NJ

 

Fredrick P. Niemann can be reached at fniemann@hnlawfirm.com, or by calling 732-863-9900, Ext. 101.