Why most people don’t need to transfer assets into a Revocable Living Trust in New Jersey
If a Trust was prepared, there is no need to sign Trust or fund the Trust until you later move outside of NJ or later own real estate outside of NJ. You do not need to list the Assets unless you sign the trust and retitle assets to be owned by a Trust. Most Legal plans recommend we draft a trust in the event the Client moves outside of NJ.
Revocable Living Trusts in other states are often recommended as a way of transferring assets to loved ones, in lieu of drafting a Last Will and Testament.
The benefits of such a Trust are routinely stated: the need to avoid probate, privacy concerns and even avoidance of death taxes. While none of these stated benefits apply to residents of New Jersey, there are other more limited reasons to consider preparing such a Trust.
Probate is easy in New Jersey. Most people in NJ do not need a $3,000-$6,000 trust. We usually inquire of persons who want a trust: “Why do they think they need a trust?’ It has to be more than- Suze Orman on TV said to get a trust, or “their friend in Florida has one". Suze Orman is in New York and it is recommended to put your assets into a Trust in New York, California, Florida. Most people in NJ only need a Will.
Why transferring assets into a Trust in NJ may not be best for you
- The attorney will often charge $3,000 for each trust [$6,000 for husband and wife]
- There is administrative work to fund the trust. Your attorney and you need to contact banks, investment companies, and other entities holding your assets to have them re titled
Real estate needs to be re titled. Your attorney will need to Prepare a new Deed computer, setting forth Property location - type street, city/town, state, zip.
-Insert in new deed current owner’s name
-Type New Owners name/s.,
-Type in prior Book # page #
-Type in the date the sellers purchased property.
-Type in- Municipal Lot and Block.
-Type in other necessary information in Deed.
Attorney must Prepare Affidavit of Title- Insert where seller will live after Deed.
- Attorney must Prepare Affidavit of Partial Exemption.
- Attorney must Prepare 1099 for no capital gains tax
- Attorney must Prepare Seller's Residency Certification/Exemption
- Attorney must Prepare correspondence to County Clerk. [Note- You must pay the mandatory fees to the County Clerks' office, and deliver or mail the Deed and papers to the Clerk's office
Plus if you have a mortgage the mortgage company may charge you a higher interest rate if you want to transfer assets into a trust.
Other assets may need to be re titled:
- You are no longer the owner of the property.
- A revocable trust does not protect assets. It usually only avoids probate
- if you set up an Irrevocable trust to try to hid/ protect assets from nursing home, you can’t be the primary trustee and can’t undo the trust
Probate is easy in New Jersey. Most people in NJ do not need a $3,000-$6,000 trust. We usually inquire of persons who want a trust: “Why do they think they need a trust?’ It has to be more than- Suze Orman on TV said to get a trust, or “their friend in Florida has one". Suze Orman is in New York and it is recommended to put your assets into t a Trust in New York, California, Florida.
A Revocable Living Trust is created during your lifetime. A Trust document is prepared which describes how the assets are to be managed, and how they are to be transferred upon death. Everything you own is then placed into the Trust.
Your house, your bank accounts, everything, is retitled into the Trust. In this way, nothing is titled into your name so that, when you die, there is nothing to go through probate. Your assets will be passed to your heirs as stated in the Trust document.
The Trust document also names a Trustee. The Trustee is the one who administers the Trust. If you create the Trust, you can be the Trustee. You can continue using and maintaining your assets just as you did before you created the Trust. You will also name one or more alternate, successor Trustees, who will take over if you become incapacitated, or when you die. The Trust document indicates how the successor Trustee will manage the assets. It will also state who will inherit the assets upon your death.
Because the Trust is “revocable”, you can change its terms or Trustees at any time. You can even revoke the entire Trust. However, upon your death, the Trust becomes “irrevocable” and the successor Trustee must abide by its terms. The average cost for this document is about $3,500.00 plus a new deed and other documents necessary to transfer assets into the Trust.
Source https://legalcounselnj.com/revocable-living-trust-new-jersey/
Revocable Living Trusts: The Negatives
So what are the negatives to having a Revocable Living Trust in New Jersey?
1 There is no need to avoid probate in New Jersey. Unlike in many other states, probate here is inexpensive and takes little time. To probate a Last Will in New Jersey, an Executor need only bring the original Last Will and death certificate to the County Surrogate’s office. In about twenty minutes, and for about $150.00, the Last Will can be probated. The average cost of a Last Will is much less than $3,500.00, and the retitling of assets is not necessary.
2 Privacy: there is no need to file an estate inventory in New Jersey. In some states, an Executor is required to file an accounting with the Probate Court listing all of the assets of the estate and the identity of the beneficiaries. If one has a Living Trust, instead of a Last Will, there is no need to file an accounting, and this information will not be made public. However, in New Jersey, even if you probate a Last Will, the filing of an accounting is not necessary. It remains between the beneficiaries. Nothing is made public in either case here.
3 A Living Trust will not shield your estate from death taxes. This is a misnomer. Regardless of whether you have a Living Trust or a traditional Last Will, if death taxes are due, they will have to be paid.
4 You must remember to title your assets into the Trust. If, after creating the Trust, you buy a house, open a new bank account, or invest, you must remember to put the asset into your Trust, and not take title in your name. Assets in your name are not controlled by the Trust or Trustee upon your death. A Last Will must then be probated.
source https://legalcounselnj.com/revocable-living-trust-new-jersey/
Revocable Living Trusts: The Positives
And the positives to having a Revocable Living Trust in New Jersey?
1 If you own real estate in another state, you will avoid the “ancillary probate” in that state. This is especially a positive if the property is located in a state like Florida, which has complex and costly probate procedures. You must then have the property owned in other states transferred into the Trust
2 You can seamlessly carry out your investment and distribution strategies by avoiding the common “hiccups” caused by financial institutions in handling estates and Powers of Attorney. Financial institutions can freeze accounts owned by a deceased individual, require funds be placed into an estate account before being passed to beneficiaries, or refuse to follow a Power of Attorney document if it is more than ten years old. However, accounts owned by a Revocable Living Trust with successor Trustees can be managed seamlessly, without the need to open another account and transfer assets.
Source https://legalcounselnj.com/revocable-living-trust-new-jersey/
Irrevocable Trust:
An Irrevocable Trust is a Trust which cannot be changed or canceled once, it is set up without the consent of the beneficiary. Contributions cannot be taken out of the trust by the grantor.
Some older people set up Trusts to avoid paying look nursing home. There is a 5 year look back. Vercammen law office does not handle Medicaid issues since this pertains to Federal laws
