Revocable or Irrevocable Trust: Which Type is What I Need?

If you have been thinking about creating an estate plan or expanding your estate plan by creating a trust, you likely have questions about the wide range of trusts that are available to be established in New Jersey. For many New Jersey residents, questions arise about the differences between revocable and irrevocable trusts, and which type you need. All trusts in New Jersey will be established as either revocable or irrevocable trusts — these are the umbrella classifications of the trusts, with different types of trusts that can then be established within those two categories.

The decision about the type of trust you should create — an irrevocable or revocable trust, as well as the more specific type of trust within one of those two categories — will depend entirely on your needs. What is your intention in creating the trust? What do you want the trust to be able to do? These questions and more are inquiries that our Summit estate planning lawyers can help to answer based on your particular circumstances. In the meantime, the following information can help to clarify general decisions about the type of trust you should create.

You May Not Have a Choice Between a Revocable or an Irrevocable Trust

Anyone who is creating a trust may prefer to have a revocable trust — one that they can amend or cancel during their lifetime if they choose to do so. However, many types of trusts will only be valid if they are created as irrevocable trusts. This includes special needs trusts, Medicaid asset protection trusts, and more. In other words, whether or not to create a revocable or an irrevocable trust may not be a question you have to consider. Rather, the overarching question is more likely to be what you want your trust to be able to do and why you are creating it.

Reasons for Creating a Trust in New Jersey

There are a wide range of reasons for establishing a trust in New Jersey. When your primary goal is to allow your beneficiaries to avoid probate, you can likely choose to establish a revocable living trust. However, if your primary aim is to protect assets from creditors for financially unstable beneficiaries, from Medicaid in the event you require long-term care, or from agencies that provide public benefits for a disabled loved one, you will likely need to establish a specific type of irrevocable trust, and an estate planning lawyer can help you.

Contact a Summit Estate Planning Attorney for Help with All of Your New Jersey Estate Plan Needs

If you are considering the creation of a trust for any reason, it is important to discuss the specific type of trust that you need with a lawyer who handles trusts in New Jersey. There are many different types of trusts that a person can create, and as we discussed above, they have different uses and purposes. Whether you want to create a revocable or irrevocable trust is just part of the determination for the best type of trust to fit your needs. One of the experienced Summit estate planning attorneys at Dempsey, Dempsey & Sheehan can discuss New Jersey trusts with you today along with any other components of estate planning. Contact our firm to find out more about how we can assist you.

Source:

law.justia.com/codes/new-jersey/title-3b/