Many people in New Jersey have probably heard of a living trust. While many people who promote them as valuable estate planning documents for good reasons, there are also a handful who may not accurately or completely inform residents of the benefits and costs of living trusts.
A living trust, as the name implies, is a trust document in which the settlors, or owners of the trust, are still alive. They place their money in the trust, which is basically an independent account subject to detailed rules about how it gets maintained and distributed. Generally, the owners name themselves as trustees, at least until they die and their children or other heirs take over.
There are several benefits to creating a living trust. For one, as many people say, the details of trusts can generally stay out of the probate process, in the sense that they are not going to be scrutinized by the court or, for that matter, the general public. Additionally, they may serve as a vehicle for reducing taxes and for protecting and preserving one's assets in the event they become unable to manage their own affairs.
Trusts do cost some additional money upfront when compared with a simple will or, for that matter, no estate plan at all. They also may take some legwork to maintain. However, their benefits could easily outweigh the costs.
The details of how a living trust works, as well as whether it is right for one's own financial situation, are generally good issues to discuss with an experienced New Jersey estate planning attorney.