Category: Trusts and Estate Taxes

Marital Trusts, Irrevocable Trusts, Living Trusts

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Reasons To Set Up A Trust

Reasons To Set Up A Trust

There are many benefits to setting up a trust, both for you and your family. A trust is a component of an estate plan which allows you to transfer or gift a portion of your assets without completely losing control of them. This is done by transferring them to a third party, called a Trustee. The Trustee will then administer the assets as you instructed to the beneficiary or beneficiaries. Here are several reasons it’s beneficial to set up a trust, compiled by our estate planning attorney in Fairfield, NJ. 

Trusts May Offer Tax Benefits 

While trusts are not only for wealthy individuals, one benefit is that a trust can reduce estate taxes for people who have substantial estates. When you transfer some or all of your assets into a trust it can reduce the overall taxable amount from your estate. There are several different ways to do this via setting up a trust, so we recommend you speak with your estate planning attorney to discuss your options and decide what’s best for you. 

A Trust Is Very Specific

Sometimes people pass away and leave ambiguous instructions in their wills, or their estate plan can be contested in court. When you create a trust you have complete control over who receives your assets, and on what terms they are able to receive them. For example, if you want to gift your child $20,000 but only want them to have access to the money once they graduate from college, a trust allows you to do this. 

Possibly Avoid A Probate With A Trust

Probate is the legal process by which a will is “proved” in court, and a judge must declare that the will is a valid representation of the deceased’s wishes. Most trusts don’t go through the probate process at all, allowing your assets to be transferred smoothly to your designated beneficiaries. Probate can be expensive and time-consuming, so avoiding it is recommended. 

Ultimate Protection

If you want a guarantee that your spouse and your children will be taken care of after your death, consider creating a trust. Divorce, remarriage, and blended families are very common, but complications can arise when it comes to inheritances. Creating a trust ensures that the rightful inheritances go to the beneficiaries, even if their family circumstances change in the future. 

If you’d like to learn more about setting up a trust and how it can benefit you and your family, or if you have any other estate planning questions, please contact our team at SCC Legal today and visit us at: https://www.scclegal.com/

 

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Requirements for a valid will in New Jersey 

Estate planning attorney New Jersey

Creating a valid will is an important part of the estate planning process. Our NJ estate planning attorneys have dealt with many cases where someone thought their will was valid, but unfortunately, due to certain laws and technicalities, their will is considered invalid. This is especially frustrating for the family of the deceased because their loved one is no longer around to help clear up any confusion and fix the problem. 

Continue reading “Requirements for a valid will in New Jersey “

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The Basics of A Trust Administration – What You Need To Know

elder law trusts nj

A trust administration happens when any settlor passes away or becomes incapacitated, and since there was a living trust involved, there would be a trust administration. A living trust contains language that spells out what happens when a settlor becomes incapacitated or when one or both of the settlers have died. That language requires specific actions by the backup trustees, sometimes the surviving spouse, in the case of marriage. 

The administration part is when the attorney works with a surviving spouse or the backup trustees to follow the directions written in that trust and make sure the trustee follows the law’s requirements. For example, if someone has died and they have a living trust the assets that were in that individual’s trust must be given to the next in line beneficiaries. Or in the case of a married couple on the first death, family trust assets must be allocated or given to a sub-trust for the use of the surviving spouse.

 A trust administration acquires an experienced attorney in this critical time; there are state, federal and county guidelines and rules that must be followed to save time and money. Often some deeds and forms are time-sensitive, and delay can cause serious problems, unnecessary expenses or missed tax savings opportunities. Plus, the surviving spouse or other beneficiaries want assurances that they will receive what they are supposed to receive in a timely, efficient, and cost-effective manner.

What is the first step?

The first step usually involves the attorney reviewing and explaining the trust to the backup trustees or surviving spouse as the case may be. This is true whether there’s an incapacity of a settler or a settler has passed away, then the attorney outlines the plan of action based upon the trust language. The surviving spouse or backup trustee must understand the process so they can make informed decisions, think of all this like a team each person working toward the same goal.

What does the surviving spouse or backup trustee usually need to bring to the first trust administration meeting with the attorney?

Typically, let’s use the death of a spouse as an example, the surviving spouse would bring in the original trust plan, about four or five death certificates, and a list of the future beneficiaries’ names, addresses and contact numbers as well. It’s also a time saver if the backup trustee is a surviving spouse and has a list of trust assets and the deeds or statements that go with each trust asset.

SCC legal is an estate planning attorney in New Jersey and our offices can go through this process with you step-by-step. We clearly outline the goals and duties to make sure everything is clear and understandable so the trust administration is wrapped up in a timely, efficient, and economical manner. We can also prepare additional estate planning documents, such as your Last Will and Testament, Health Care Proxy/Medical Directive, Power of Attorney documents and trusts. For more compassionate legal guidance and a free consultation, please contact us or visit our website at https://www.scclegal.com/

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What is the Role of a Trust Protector

elder law trusts nj

A trust can fulfill many useful estate planning goals, from providing for your family and planning for your golden years to protecting your hard-earned assets from taxation. One of the roles that you might consider adding to your trust is a trust protector. Here’s some insight into this position, from an estate planning attorney in New Jersey.

  • What is a Trust Protector?

A trust protector is a person you appoint to watch over your trust in the long-term, specifically to ensure that the trust or the goals of the trust aren’t compromised or negatively affected by changes to laws or the circumstances surrounding the trust. They are usually an independent third party who specializes in this field, for instance, your estate planning attorney.

  • What Do They Do?

The role of the trust protector is usually to oversee irrevocable living trusts, which are trusts where the grantor cannot simply make changes to the terms of the trust, as they are permanent. Of course, no one can see into the future and, if something should happen that affects the ability of the trust to fulfil its goal, the trust protector – and only the trust protector – can step in and take action.

This is a very important role in the event of something like a crash in the stock market. If investments are falling alarmingly, it can be viewed as an emergency situation. Beneficiaries and grantors can’t access these assets directly to protect them, but the trust protector can.

The extent to which a trust protector can act depends on the powers that the grantor of the trust bestows on them, so it differs from trust to trust and depends a lot on what you, the grantor, permits. Some trust protectors can remove and replace existing trustees, settle disputes between trustees and/or beneficiaries, alter trust provisions, approve or veto investment decisions, or approve or veto discretionary distributions. Essentially, they are there to provide objective and expert oversight. 

In addition, this role can be expanded to provide assistance to grantors and beneficiaries, as you can empower them to modify your trust according to your wishes as grantor without having to formally amend the trust documentation, they can modify the trust after your death to keep it in line with your original goals (for instance, adding a new grandchild as a beneficiary), and maintaining the legal protection and tax benefits that caused you to create the trust in the first place.

Advice on Trusts, Wills, Power of Attorney and More from Your Estate Planning Attorney in NJ

At Sedita, Campisano and Campisano in New Jersey, estate planning attorney Frank Campisano is ready to assist you with all your estate planning needs, whether you need to make a business succession plan, Last Will and Testament, Power of Attorney, Medical Directive, a Living trust or to minimize inheritance tax on your estate.

Contact us today and let us deliver expert estate planning advice to take care of all your wishes – whether your estate is big or small. For more information, please visit our website at https://www.scclegal.com/

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What are the Tax Implications for a Trust?

elder law trusts nj

One of the primary goals for estate planning is to minimize taxation on your estate, ensuring that your assets got towards caring for your family and not towards the state. One of the most effective tools used in estate planning is a trust. Here’s some insight into how family trusts are taxed, from an elder law attorney in New Jersey.

Grantor vs. Non-Grantor Trusts

Trusts fall into two categories that are especially relevant when talking about taxation. A grantor trust often allows the person creating the trust the right to withdraw assets from the trust – so, most revocable trusts are grantor trusts. This means that the trust does not have to file its own tax return. Instead, the grantor much include any income from the tax in their own, individual tax return and pay accordingly.

If a trust does not allow this (an irrevocable trust, for example), then it will have to file a tax return that can mean that the trust itself pays tax and that those beneficiaries earning an income from the trust will have to pay tax as well. This can become incredibly complex – for example, if they trust has to pay out it’s income to a beneficiary, then it is entitled to certain deductions, while remaining income that stays within the trust gets taxed to the trust directly.

Always Get Expert Advice When Creating a Trust 

If you’ve looked into creating a trust for your family, then you know that there are many different trusts out there to meet a vast range of goals. These trusts can also be tailored to your specific needs, which makes them even more complex. This makes it essential that you work with an experienced professional to develop a trust that achieves your goals and that you are completely aware of how taxation will impact this trust, so that you can make the best possible informed decision.

Speak to a Leading Elder Law Attorney in NJ Today for Compassionate Advice 

If you would like assistance in understanding and accessing your Medicaid and Medicare benefits, speak to Frank R. Campisano today. Experienced in elder law, compassionate and committed to his clients, you’ll receive the highest quality legal expertise and guidance that will help you secure better care. In addition, you can also prepare additional estate planning documents, such as your Last Will and Testament, Healthcare Proxy, Power of Attorney documents and trusts. For more compassionate legal guidance and a free consultation, please contact us or visit our website at https://www.scclegal.com/

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A Crummey Trust may benefit your estate plan

elder law trusts nj

Trusts are fast becoming a popular means of protecting assets from taxation and probate while benefitting heirs, and there are many different types of legal trusts available for achieving this. One such example is a Crummey Trust. Here is some insight into this useful tool, from a leading estate planning attorney in New Jersey.

What is a Crummey Trust? 

This is a trust that allows a parent to make gifts to his or her children that are excluded from gift or estate taxation as long as they are equal or less than the permitted value. At the moment, this is $13,000 per year, but is subject to change at any time.

What are the advantages of this type of trust? 

While gifting is a great tool for benefitting your heirs during your lifetime in a tax-free way, the problem is that for minor children, $13,000 is far too much for them to handle responsibly. Most parents would prefer that this money goes to their child at a more suitable age where they can use it well, but would also like to get the benefits of starting the tax-free gifting process as early as possible.

The Crummey Trust solves this issue by allowing parents to gift the annual amount to their children every year, tax-free, but stipulate at exactly which age their child or children are allowed to access the funds. The trustee is able to invest the money within the trust and the children will have the full benefit of the asset at an age designated by you.

In traditional trusts, the child has a “present interest” in the gifts which can mean that they can withdraw and spend funds as they wish, and the Crummey Trust negates this. This is done by giving the child 30 days in which to withdraw the money and use it (in order to maintain the “present interest” of the child), but once this time period lapses, the money can only be withdrawn when the child reaches the designated age. In addition, if the child does decide to withdraw the funds, they can only access the most recent amount deposited within that time period, not the full amount of the trust.

Find the trust that’s the right fit for your needs – Speak to your NJ estate planning attorney 

You deserve a legal solution that is uniquely tailored to your needs, so speak to New Jersey estate planning attorney Frank R. Campisano today. Whether you want to create a Crummey Trust for your child, a Last Will and Testament or are interested in updating more complex estate planning documents such as Medical Directives and Powers of Attorney documents, he can ensure that the right legal documentation is developed in order to meet your specific wishes.

For peace of mind estate planning or advice on creating your Last Will and Testament, please contact Frank R. Campisano or visit our website today at https://www.scclegal.com/

 

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Does your trust have any of these problems? Speak to your NJ estate planning attorney

A trust is a very useful and practical part of an estate plan that can bring considerable benefits to you and your loved ones, including tax reductions – but only if it is created and managed properly. Here are some of the most common issues with trusts to look out for, from a leading estate planning attorney in New Jersey.

  • Missing personal details: In order to be administered effectively, your trust must be able to clearly identify beneficiaries, administrators and other important individuals. Incomplete or misspelled names and addresses can lead to confusion and misidentification of beneficiaries.
  • Forgetting to include your retirement plan: For many families, their retirement plan is often their biggest asset after their property, and yet it is often forgotten when drawing up a trust or estate plan. Such a significant asset should be prioritized within your estate planning to avoid increasing taxation.
  • Inadequate planning for your incapacity: Your trust should include clear instructions on who should control it if you become incapacitated, as well as a clear set of parameters to define what would qualify you as incapacitated. This will also have to include instructions they need to follow regarding gifting, investments and more.
  • Limiting powers of trustees: While limiting the powers of trustees seems sensible, it is important that the powers given to them are broad enough to ensure that they can properly manage your trust. Otherwise, they will have to keep returning to court in order to get legal permission to do their jobs.
  • Not updating your estate plan: Your trust and estate plan should be updated on a fairly regular basis, especially if you have added to your family with a new child or grandchild, gotten divorced or remarried, etc. This will ensure that your intentions to provide for your loved ones is in line with the trust, rather than excluding a potential beneficiary that you would have wanted to include.
  • Forgetting other estate planning documents: A trust is an important and useful estate planning tool, but it should be supplemented by other supporting documents. These can include a Last Will and Testament, medical directive, Financial Power of Attorney and other legal documents that help to protect your assets and wellbeing.

Speak to a NJ estate planning attorney today for comprehensive services 

If you would like further guidance on creating or updating your trust or creating other estate planning documents including a Last Will and Testament, Frank R. Campisano can provide you with the necessary expert legal advice and professional insight.

In addition, he can also assist you with all other aspects of your estate plan, from drawing up medical directives and Power of Attorney documents to Medicaid planning. For more information on setting up or changing an estate plan, please contact Frank at the law firm of Sedita, Campisano & Campisano, LLC in New Jersey or visit our website at https://www.scclegal.com/

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Estate planning in NJ: The right way to include your home in a living trust

Estate law is fairly complex and people can quickly run into significant issues when their assets aren’t correctly included in their estate plan. Here are some tips from a leading New Jersey estate planning attorney.

If your home is incorrectly included in a living trust, then you and your beneficiaries may run into problems that include:

  • Your home going through probate because the trust fails to correctly identify the property.
  • Your wishes may not be clear, allowing the State to distribute your home according to State law rather than the rules of the trust. This can happen when your home is not listed as a trust asset even if your Last Will and Testament declares that everything should go to a certain beneficiary.

This can lead to delays on your estate as well as increased legal fees as your family and loved ones have to approach the courts to legally correct this error.

If you want to include your home in your living trust, always check: 

  • That you have signed and notarized a new deed when you create your trust.
  • That your home is listed with its full address in your trust in the schedule of assets.
  • That the name of your trust on the new deed matches the name of your trust exactly.
  • That your trust is listed as the insured on your home’s insurance policy.

Have your living trust set up by an experienced NJ estate planning attorney 

If you would like further guidance on creating a revocable living trust or a Last Will and Testament, Frank R. Campisano can provide you with the necessary expert legal advice and professional insight.

In addition, he can also assist you with all other aspects of your estate plan, from drawing up medical directives and Power of Attorney documents to Medicaid planning. For more information on setting up or changing an estate plan, please contact Frank at the law firm of Sedita, Campisano & Campisano, LLC in New Jersey or visit our website at https://www.scclegal.com/

 

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