A living trust, sometimes referred to as an “inter vivos” trust, is a trust that is created while the creator is still alive. The beneficiaries named in the living trust will receive their inheritance under the care of a trustee, assigned by the living trust.

There are two types of living trusts: revocable and irrevocable. A revocable trust can be modified at any time, and the creator can be designated as the trustee, with a “successor trustee” also assigned to take on the role of trustee once the creator passes away. An irrevocable trust cannot be modified once it is created, meaning that the creator will often need to give up a certain amount of control over the assets they list.

In most cases, people create revocable living trusts to avoid the probate process. Probate is a very public process, and an estate that goes through probate will have the records of the estate and all assets listed available to the public. With a living will that does not go through probate, the distribution process will remain private information in New Jersey state.

Additionally, living trusts allow creators to exercise very specific control over their assets, particularly their financial affairs. Let’s say Anthony wants to leave an inheritance to his three sons. However, he only trusts two of his sons to be responsible with the inheritance while the third son has a history of gambling addiction. Despite the financial irresponsibility of his third son, a living trust will ensure his third son will be cared for without the risk of the inheritance being squandered.

If someone has property or assets spread across multiple states, then a revocable trust is often a very efficient way to manage the inheritance process. Setting up a revocable trust with specific instructions can save money, time, and protect beneficiaries from the headache of dealing with the dispersal of an estate across state lines.

A living trust is often significantly more complicated than a last will and testament. This means that it will take more time and consideration to draft a living trust. This can lead to a higher likelihood of mistakes for those who attempt to create a living trust by themselves, which is not recommended. The recommended route is to consult with a lawyer during the creation process, but this is likely to lead to higher attorney fees as opposed to creating a will.

A living trust also requires constant attention. Any asset that is not listed explicitly within the living trust will be subject to probate, and the distribution will be authorized by New Jersey state intestacy laws if no instruction is included for the unlisted assets. To avoid this, a living trust must be modified to include any new assets or property obtained by the creator.

Unless the creator has something called a “pour-over” will, anything not explicitly named in the living trust will still be subject to the state’s intestacy laws. A pour-over will is a catchall document that states that anything not included in the trust at the time of its creator’s passing will be distributed according to the instructions contained in the pour-over will.

Ultimately, the decision of whether or not to include a living trust in one’s estate plan will come down to the specific details of their assets and family dynamic. When you work with an estate planning attorney, they will review the entire estate to determine whether there are any potential issues that may arise based on the different options available, and advise you as to which method is best suited for your needs.