FAQs for Wills and Trusts

A will, or a “last will and testament,” is a legal document that specifies how a person wants their property and assets distributed after their death. It can also include provisions for the care of any minor children. The will is executed under the supervision of a legal representative or executor, as per the decedent’s wishes.

A trust is a legal arrangement in which a person (the grantor) transfers assets or property to another person or entity (the trustee) to hold and manage for the benefit of one or more beneficiaries. Trusts can be created during the grantor’s lifetime (a living trust) or upon their death through a provision in their will (a testamentary trust).

Having a will in New Jersey allows you to control the distribution of your assets after your death, ensuring that your property goes to the people or organizations you choose. It also allows you to appoint a trusted person as the executor of your estate to manage your affairs. If you have minor children, a will enables you to nominate a guardian for them. Without a will, the distribution of your assets and guardianship of minor children would be determined according to New Jersey’s intestacy laws, which may not align with your personal wishes.

If you die without a will in New Jersey, your estate is considered “intestate” and your assets are distributed according to state intestacy laws. These laws follow a specific order of succession, typically starting with your spouse and children, if you have them. If you do not, the state moves on to other relatives like your parents, siblings, or more distant relatives. If no relatives can be found, the state may receive your assets. Furthermore, without a will, the court will appoint a guardian for any minor children and an administrator for your estate, which might not align with your preferences.

In New Jersey, a revocable trust, also known as a living trust, is a legal entity created to hold assets during your lifetime, which can be altered, changed, modified or revoked entirely by you, the grantor. Upon your death, the trust assets are then transferred to your designated beneficiaries, avoiding probate. An irrevocable trust, on the other hand, cannot be altered, changed, or revoked after its creation without the consent of the beneficiaries. This type of trust is often used for asset protection and estate tax benefits, as assets in an irrevocable trust are generally not considered part of your estate for tax purposes. Both types of trusts have their advantages and disadvantages, and the choice between them depends on individual circumstances and goals.

Having a trust in New Jersey provides several benefits. Firstly, it can help avoid the probate process, which can be time-consuming and expensive. By transferring your assets into a trust, they will be distributed to your beneficiaries upon your death according to the trust’s terms without court supervision. Trusts also provide more privacy than a will because they are not part of public record. A trust, particularly an irrevocable one, can also help reduce estate tax liability and protect assets from creditors. Finally, a trust allows for the management of assets for beneficiaries who may be too young or otherwise unable to handle financial matters.

Yes, in New Jersey, you can have both a will and a trust. In fact, it’s quite common and often beneficial to have both. A trust manages certain assets during your lifetime and beyond, providing privacy and avoiding probate. A will can cover any assets not included in the trust, appoint an executor, and allow you to name a guardian for minor children. Furthermore, a “pour-over” will can specify that any remaining assets at your death be transferred into your trust. Thus, having both a will and a trust provides a comprehensive estate plan.