The Estate Planning Toolbox: The Revocable Trust
Estate planning can feel overwhelming, especially in New Jersey. Today, we'll explore the revocable trust, a useful estate planning tool.
A revocable living trust lets assets pass directly to heirs without probate. This means faster access to assets and less cost after death.
While probate in New Jersey is simpler than other states, it can still delay asset access. Revocable trusts bypass this process for assets held within the trust.
If a granter becomes incapacitated, a successor trustee can manage the trust. This avoids court involvement and protects the granter's wishes and assets.
Revocable trusts keep family financial matters private. Unlike wills, trusts don't become public record during probate.
However, revocable trusts don't provide immediate tax benefits.
Assets remain part of the granter's estate for tax purposes.
New Jersey inheritance tax depends on beneficiary class. Class A beneficiaries like spouses and children are exempt from tax. Class C beneficiaries pay 11% to 16% while class D faces 15% plus extra rates. Class B beneficiaries include siblings and are taxed differently.
Not all assets transfer easily into a revocable trust.
Some financial accounts and out-of-state properties may require additional steps or probate.
In summary, revocable trusts offer a streamlined way to manage estates.
They provide benefits but also have important limitations to consider.
Understanding these details helps New Jersey residents make informed estate decisions.
Consulting legal and financial experts is key to navigating this complex area.
