Living Trust

This content is provided for informational purposes only. For specific legal advice, please consult with a qualified professional or an official government agency.

A Living Trust is a legal arrangement in which the asset owner (Grantor/Settlor) transfers the authority to manage their assets to a Trustee during their lifetime. It serves as a vital supplement to a Will by specifying how assets will be managed and distributed after the Grantor’s passing.

Types of Living Trusts

  • Revocable Living Trust: The most common form of trust. The Grantor retains full control over the assets and can modify or dissolve the trust at any time during their lifetime. 
  • Irrevocable Living Trust: Once established, this trust is extremely difficult to amend or revoke. It is primarily used for asset protection, estate tax reduction, or qualifying for government benefits such as Medicaid (Long-term Care).

Key Advantages of a Living Trust

Avoidance of Probate

While a Last Will and Testament must go through the Surrogate’s Court for Probate, a Living Trust allows assets to pass directly to beneficiaries without court intervention. Although New Jersey’s probate process is relatively streamlined compared to other states, a trust ensures an even more immediate transfer of assets.

Privacy Protection

A Living Trust remains a private document; therefore, the size of the estate and the details of the distribution are not disclosed to the public. In contrast, a Will becomes a Public Record once filed with the court, making it accessible to anyone.

Incapacity Planning

If the Grantor becomes unable to manage their affairs due to illness (such as dementia) or accident, a pre-designated Successor Trustee can immediately step in to manage the assets. This bypasses the need for a costly and time-consuming court-ordered Conservatorship or Guardianship proceeding.

Protection of Assets for Minor Children

A Living Trust allows you to set specific conditions—such as milestone ages—for when children receive their inheritance, which promotes long-term financial stability.

Considerations

  • Setup and Maintenance Costs: Establishing and maintaining a trust requires significant initial legal fees and administrative effort. For smaller estates, these costs may potentially exceed the eventual cost of probate. 
  • Requirement of a “Pour-Over Will”: Even with a trust, a Pour-Over Will is essential. This ensures that any assets accidentally left out of the trust’s name are legally “poured” into the trust upon the owner’s death. 
  • Funding the Trust: Simply signing the trust documents is insufficient. For the trust to be effective, you must “fund” it by changing the titles of your assets—such as real estate (Deeds) and bank accounts—into the name of the trust (e.g., The [Name] Living Trust). 
  • Alternative Options: Simpler and more cost-effective methods for asset transfer exist, such as Payable on Death (POD) or Transfer on Death (TOD) designations on accounts. 
  • Professional Selection: Seek advice from a certified Estate Planning Attorney. If you meet certain income requirements, you may be eligible for free legal assistance through organizations such as the Northeast New Jersey Legal Services (NNJLS).

Contact

AgencyPrimary ServicesContact Information
NJ ADRC
(Aging & Disability Resource Connection)
Service connection and counseling for seniors, individuals with disabilities (18 and above), and family caregivers by county.1-877-222-3737
(Calls are automatically routed to your local county office)
Bergen County Division of Senior ServicesInformation, assistance, and referrals for legal services.One Bergen County Plaza
2nd Floor
Hackensack, NJ 07601
201-336-7400
seniors@bergencountynj.gov
NNJLS
(Northeast New Jersey Legal Services)
Free legal aid for low-income residents, seniors, and the disabled (subject to eligibility).190 Moore Street, Suite 100,
Hackensack, NJ 07601
201-487-2166
NNJLS.ORG
LSNJ
(Legal Services of New Jersey Hotline)
Statewide legal hotline providing free legal advice and information.1-888-576-5529
lsnjlawhotline.org

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