Marriage is a serious commitment that is about more than just sharing your lives together – it affects your assets as well. And while most couples don’t plan on ever getting a divorce, it’s sensible to remove as many risks to ourselves as possible. This is where prenuptial agreements come into play, but often couples feel like these documents signify that they don’t trust their spouse or have faith that the marriage will last. There is a viable alternative to the dreaded prenup, however: an asset protection trust from an estate planning attorney in New Jersey.
What is an asset protection trust?
This can take the form of a revocable or irrevocable trust. Here’s how it works:
- Revocable trust – Before you are married, simply have the papers drawn up for a revocable trust and place your assets in the trust itself. This means that those assets belong to the trust – not to you – and they cannot be considered as part of a divorce, unlike assets you buy after your marriage. You can decide on the beneficiaries of the trust and under what circumstances they will benefit. If you no longer agree with the trust’s original terms, you can change or dissolve it at any point.
- Irrevocable trust – This is similar to the first trust structure in the sense that all assets you place within the trust before your marriage will be in the trust’s name and cannot be included in the event of a divorce. The difference is that once you put assets into the trust, they cannot be removed. This can be a benefit if your assets are more than the federal estate tax exemption, as the assets in the trust will not be taxed after your death.
What are the advantages of a trust over a prenuptial agreement?
- Unlike a prenuptial agreement, the trust can be formed yourself, and it is not an agreement between both parties.
- A prenuptial agreement can be challenged effectively and doesn’t protect against excessive child support claims.
- A trust allows you to hold all the power over the assets you had before your marriage, including how they are divided/who benefits during your lifetime and after your death. A prenuptial agreement is not effective after your death.
Professional, effective estate planning with your NJ attorney
At Sedita, Campisano & Campisano, LLC, we have over 30 years of experience in New Jersey estate planning law. We can assist you with estate planning for digital assets, as well as in creating a Last Will and Testament, Power of Attorney and medical directives as well as set up trusts appropriate to your specific needs. Let us deliver expert estate planning advice to take care of all your wishes – whether your estate is big or small – simply contact us or visit our website at https://www.scclegal.com/ today.