One of the most important parts of long-term financial planning is managing matters regarding your estate, which is why we offer a wide variety of estate planning services in NJ. You worked hard your entire life to generate income and acquire assets that you would eventually want to pass on to those you love. Setting up a trust and selecting a trustee are crucial to sound estate planning in many situations. A trust can help minimize administrative fees and estate & inheritance taxes as well as resolve issues that may arise after you have passed.
What Is a Trust?
A trust is a legal framework that allows a third-party to hold on to your property and carry out your wishes, so your heirs do not end up in probate court, which could be time-intensive and expensive. There are many types of trusts. One type is an irrevocable trust. An irrevocable trust takes ownership of specified assets away from the individual, so the estate in most cases isn't taxed on those assets at the individuals’ death. This could prove invaluable to those beholden to the estate tax. However, since the federal estate tax isn't applicable to estates under $5.45 million and the laws for this type of trust can be complicated, irrevocable trusts aren't suitable for most people.
Revocable trusts, on the other hand, can be highly useful for a variety of people looking to make the eventual transfer of assets to specified parties much easier. In this type of trust, an individual can include all of his or her assets subject to probate, including any investment account, bank accounts, or properties such as a home. This allows heirs to receive the assets much more quickly and do so without having to worry about probate court. In addition to that, they can usually avoid major legal fees and other costs that can often occur in estate disputes.
What Should You Consider When Choosing a Trustee?
When you create a trust for your assets, you will need to appoint a trustee to ensure your wishes are kept. Therefore, you'll obviously want to choose someone you can trust. You'll want to make sure he or she doesn't apply any personal beliefs or biases that may counter what you have specified. In addition to that, you'll want to consider the age of the trustee. You don't want to choose someone who is older or in poor health as that person may not be able to perform the duties of the trustee when needed.
You don't necessarily need to choose a family member or a friend to handle your trust. If you have interfamilial issues or don't have confidence in any of your friends or business associates, you can choose to enlist the services of a trust expert or company to carry out your wishes. This is especially a viable option if your estate is substantial , complicated, or if you feel that an individual trustee will not be able to manage family disputes over the estate or not be able to handle any other of his or her duties.
A trust can be a crucial part of financial planning because you could be setting up your family and/or friends with assets that could help them lead successful lives. You'll want to know that your wishes are carried out, and your assets are protected. Keep all of these things in mind when you chose a trustee to ensure these goals are met.