• Supporting Our Clients and the Community During the COVID-19 Pandemic.
    • Skip to primary navigation
    • Skip to main content
    • Skip to primary sidebar
    • Skip to footer
    • Home
    • Our Firm
      • About Our Firm
      • Attorney and Staff Profiles
      • Communities We Serve
        • Bergen County
        • Clifton
        • Essex County
        • Hudson County
        • Hunterdon County
        • Middlesex County
          • Edison
          • Woodbridge
        • Morris County
        • Passaic County
        • Somerset County
          • Hillsborough
          • Warren
        • Sussex County
          • Franklin
        • Union County
          • Plainfield
    • Services
      • Asset & Business Planning
      • Estate And Gift Tax Figures
      • Estate Planning Services
      • Incapacity Planning
      • IRA & Retirement Planning
      • Legacy Planning Services
      • Medicaid and Elder Law
      • SECURE Act
      • Special Needs Planning
      • Trust Administration
    • Webinars
    • Resources
      • Elder Law
        • Elder Law & Medicaid Definitions
        • Elder Law reports
        • Elder Law Resources
          • Plainfield Elder Law
      • Estate Planning
        • Estate Planning Checkup
        • Estate Planning Definitions
        • Incapacity Planning Definitions
        • Is Your Estate Plan Outdated?
        • New Jersey Estate Planning Resources
        • Top 10 Estate and Legacy Planning Techniques
      • Free Estate Planning Worksheet
      • Free Seminars
      • Frequently Asked Questions
        • Business Succession Planning
        • Estate Planning
        • Elder Law
        • Estate Planning for Women
        • Frequently Asked Questions for Families Without an Estate Plan
        • Legacy Wealth Planning
        • LGBTQ Estate Planning
        • Medicaid
        • Trust Administration & Probate
        • Wills and Trusts
      • Newsletters
      • Pre Consultation Form
      • Probate and Trust Administration
        • Bereavement Resources
        • How to Know if You Need Extra Help With Your Grieving
        • Loss of a Loved One
        • Probate Resources
          • Hillsborough Township Probate
          • Plainfield Probate
        • The Mourner’s Bill of Rights
        • Things You Need To Do When a Loved One Passes Away With a Trust
        • Things You Need To Do When a Loved One Passes Away With a Will
        • Trust Administration & Probate Definitions
      • Published Books
    • Reviews
      • Our Reviews
      • Review Us
    • Blog
    • Contact Us

    Augulis Law Firm

    New Jersey Estate Planning Information Center

    Connect with us today(908) 222-8803

    • Attend A Seminar
      • Attend A Webinar
    • Facebook
    • Twitter
    • Linkdin
    • Youtube
    • Instagram
    Committed to helping New Jersey families preserve and protect their wealth.
    Home » Wills and Trusts » What Is a Trust and How Can It Enhance My Estate Plan?

    What Is a Trust and How Can It Enhance My Estate Plan?

    October 2, 2017Wills and Trusts

    If you’ve ever wondered why trusts are so popular and what they can do for your estate plan, wonder no more. We’re here to answer that question that’s on so many people’s minds: what is a trust?Estate planning can be an exciting process, but there’s no denying that it can be complex and confusing too. For many people who lack familiarity with estate planning techniques, various tools like powers of attorney and trusts can often seem like foreign concepts. Still, those tools can often mean the difference between an inefficient plan and one that can resolve a wide variety of different planning needs. And since the trust is one of the most important tools in any estate planning arsenal, it’s vital that you have at least some understanding of how they can benefit you. So, what is a trust and how can it enhance your estate plan?

    Trust Basics

    The basics of the trust are relatively simple in nature. The trust relationship is one in which one party gives its property to a second party, and that second party manages and protects those assets for the benefit of a third party. There are certain specific elements that must be present in every trust to make it a valid trust relationship:

    • A trust must have a grantor. That’s the person who creates the trust and funds it to accomplish his mission of delivering assets to heirs or other beneficiaries.
    • The trust must also have a trustee. With a revocable trust, the grantor can name himself as the trustee, and appoint a backup known as the successor trustee to take over control of the assets when he dies. The trustee is charged with protecting those assets and using them for the benefit of any named beneficiaries.
    • The trust must also include named beneficiaries. These are the people or entities for whom the trust is established, and it is they who ultimately receive the benefit of any assets in the trust.
    • Trusts require funding. The grantor transfers ownership of some or all his assets to the trust, and those assets are then managed by the trustee.
    • Every trust also need terms. These are the instructions that define how the trust operates, determine the extent of the trustee’s powers and responsibilities, and detail any other relevant information required for the trust’s operations.

    Types of Trusts

    There are a variety of trust types, and different ways of categorizing the types of trusts that you’ll hear about. To begin with, trusts can be either living or testamentary. The living trust is a trust that is active during the grantor’s lifetime. The testamentary trust is a type of trust that is created by the provisions of a Last Will and Testament, and thus doesn’t come into being until after the grantor is dead.

    Living trusts also can be divided into two types of trusts: the revocable and the irrevocable. While these two trust types share the same basic structure and elements, their terms can be dramatically different. The revocable trust can be revoked at any time during the grantor’s life – just as the name suggests. That’s in addition to the grantor’s ability to retain control over his trust assets by naming himself as the trustee. The irrevocable trust cannot be changed or revoked, so assets that are transferred into it cannot be reclaimed by the grantor.

    Of course, there are also a variety of specialty trusts that are designed to accomplish certain goals. These trusts are all similar in structure, but have trust terms designed to help the grantor accomplish special estate planning goals. They often address things like special needs heirs, charitable donations, or concerns about various taxes or asset protection.

    What Can a Trust Do?

    The primary purpose of every trust is to transfer assets to beneficiaries. If that purpose is not evident from the trust terms, then it’s likely that the trust won’t be recognized as valid if it’s ever challenged. In addition to that primary goal, however, trusts can be used to meet many other estate planning challenges:

    • Your trust can eliminate the need for probate by providing a legal way to transfer assets to your heirs.
    • The trust can help to maintain your estate’s privacy by keeping its settlement process out of the courts.
    • Trusts can provide a better way to pass money or other assets to minor heirs, disabled beneficiaries, charitable organizations, and heirs who might not have the money management skills needed to cope with a large bequest from a will.
    • When your trust is irrevocable, you can gain important asset protection, reduce the impact of estate taxes, and help yourself meet the eligibility standards for critical long-term care benefits like those offered by the Medicaid program.
    • Trusts can help you deal with out-of-state property concerns by eliminating the need for probate in those states.

    How Does a Trust Impact Your Planning?

    If you’ve never really considered the trust option, then it can be difficult to envision how it can benefit your comprehensive estate planning effort. However, the impact of a trust can be dramatic, especially when you have even a moderate number of valuable assets. The Last Will and Testament may be the backbone of most estate plans, but that doesn’t mean that it’s always the best way to address every planning need. For example, you cannot leave money directly to minors, but a trust can make that process much simpler. You also may not be able to leave money to an heir with special needs without impacting government benefits that he or she may need to survive. The right kind of trust can resolve that challenge as well.

    So, what is a trust? It just might be the missing ingredient in your estate planning strategy! The best way to find out whether that’s true in your case is to consult with an experienced trusts attorney in your area. The estate planning experts at the Augulis Law Firm can help you to evaluate your existing estate plan or begin the process of crafting an entirely new plan. We’ll also work with you to find the best solutions to your estate planning obstacles, and can help you determine whether a trust is right for you. To learn more about trusts and their benefits, contact us at our website, www.AuguliaLawFirm.com or give us a call at (908) 222-8803.

    • Author
    • Recent Posts
    Alan Augulis, Estate Planning Attorney
    Mr. Augulis founded his Warren, New Jersey law firm so that he could focus his practice in the areas of advanced estate planning and tax law. Mr. Augulis has invested considerable time and energy helping to educate others on the topic of estate planning and has become a sought-after speaker in the tax and estate planning arena because of his informative and entertaining seminars.
    Latest posts by Alan Augulis, Estate Planning Attorney (see all)
    • Important Subjects to Discuss with Your Estate Planning Attorney - January 23, 2023
    • Planning for the Possibility of Dementia - January 20, 2023
    • How to Prepare for Retirement - January 17, 2023

    About Alan Augulis, Estate Planning Attorney

    Mr. Augulis founded his Warren, New Jersey law firm so that he could focus his practice in the areas of advanced estate planning and tax law. Mr. Augulis has invested considerable time and energy helping to educate others on the topic of estate planning and has become a sought-after speaker in the tax and estate planning arena because of his informative and entertaining seminars.

    Primary Sidebar

    Augulis Law Firm

    Free Estate Planning Worksheet

    There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.
    • This field is for validation purposes and should be left unchanged.

    Follow Us

    • Facebook
    • Twitter
    • Linkdin
    • Youtube
    • Instagram

    Testimonials

    Client Review
    August 4, 2020
        

    Very happy with work. Everything explained clearly and concisely and all my questions were answered completely. Process of putting together plan and review of documents was very organized and easy to understand.

    norm

    Blog Subscription

    • This field is for validation purposes and should be left unchanged.

    Where we are

    Augulis Law Firm
    5 Mountain Blvd. Suite 5
    Warren Twp, NJ 07059
    Phone: (908) 222-8803
    Fax: (908) 222-8815

    See Larger Map Get Directions

    Office Hours

    Monday9:00 AM - 5:00 PM
    Tuesday9:00 AM - 5:00 PM
    Wednesday9:00 AM - 5:00 PM
    Thursday9:00 AM - 5:00 PM
    Friday9:00 AM - 5:00 PM

    Map

    map

    Footer

    • Advantages of Working With Our Firm
    • Disclaimer
    • Privacy Policy
    • Sitemap
    • Contact Us

    Connect with Us

    • Facebook
    • Twitter
    • Linkdin
    • Youtube
    • Instagram
    footer-logo

    Augulis Law Firm
    All Right Reseved.

    Attorney Advertisement

    © 2023 American Academy of Estate Planning Attorneys, Inc.