A New Jersey estate plan helps you maintain control over your health and financial affairs. It may also help you accomplish a wide range of specific objectives. While virtually all New Jersey estate plans include wills, state residents are increasingly recognizing the benefits that come with creating one or more trusts.
According to Kiplinger, a trust is essentially an arrangement that exists between two parties: you, the settlor, and the person you appoint to oversee the trust, who becomes your trustee. While different types of trusts exist, enabling you to accomplish different goals, many people choose to create them in an effort to do the following.
Protect eligibility for public assistance programs
If you have beneficiaries who also use certain forms of means-based government assistance, leaving those individuals’ assets in a will may make them ineligible to receive the government benefits they need. Those who use Medicaid and other means-based assistance programs have to go through testing to prove they need the help. If your beneficiary has too much money to his or her name, this could make him or her ineligible for benefits.
Make distributions under specific circumstances
A trust also allows you to make specific stipulations about when your trustee should distribute the assets inside. For example, you may want to have your trustee distribute assets to your kids only after they graduate college, reach a particular age or what have you. This may help you avoid having one or more beneficiaries blow through your legacy within a short window.
While many people choose to create trusts for these reasons, there are many other things you may also be able to do by including a trust in your estate plan.