Quite often a revocable living trust will fail because individuals do not understand the importance of changing ownership of assets to the trust.
Provided by: The Wealth Advisor
In most cases that means the unnecessary expense of a probate proceeding that could have been avoided.
The New Jersey living trust is a revocable trust designed to avoid probate and provide long-term property management.
A revocable living trust can be terminated or changed at any time during the grantor’s lifetime.
The New Jersey living trust allows the grantor to appoint himself or herself as trustee and exercise complete control over trust assets.
In the eyes of the IRS, a revocable living trust is transparent, allowing the grantor, as trustee, to buy, sell, trade, mortgage, liquidate, gift or otherwise treat trust property as personal property while having no impact on personal income taxes.
A living trust is established when the grantor prepares and executes a declaration of trust. The declaration of trust sets forth the terms and conditions of the living trust. To control trust assets, the grantor appoints himself or herself as trustee.
After creating the living trust, the grantor transfers personal assets into it, which is referred to as funding the trust.
To transfer real estate into the living trust, a real property deed naming the living trust as grantee is executed and recorded. Bank accounts, retirement accounts and life insurance policies can be transferred as well.
The grantor, as trustee of the living trust, then manages trust assets for his or her personal benefit as well as the benefit of the beneficiaries.
Though the living trust is also managed for the benefit of beneficiaries, a trust beneficiary receives nothing until after the grantor’s death.
Upon the grantor’s death, the successor trustee becomes acting trustee and passes New Jersey living trust property to the beneficiaries without need of probate.