TRUST to transfer property in addition to Wills

Compiled by Kenneth Vercammen

Probate is defined as the procedure by which an Executor proceeds to admit a
Will to the jurisdiction of the Surrogate Court, which is proed to be alid or inalid! "he
term generally includes all matters relating to the administration of estates! "here are
instances where Surrogate Court monitoring of the estate is desirable! #uch has been
written about the disadantages of probate! $ollowing are just a few of the problems
associated with probate and why certain people set up "rusts in addition to Wills!
%ac& 'f Priacy
(ocuments filed with the Surrogate Court are public information! "hey are
aailable for inspection to anyone who as&s! )n large estates, which re*uire an
accounting, your probate file will contain a complete list of all assets deised by your
Will including business assets! "his lac& of priacy may lead to problems among family
members who now &now the plan of distribution and may then contest any proisions
with which they disagree! (isinherited relaties and creditors are notified and gien
time by the Court to contest the Will distribution!
"ime Consuming
"he probate of an estate may ta&e seeral months to seeral years to complete!
(uring that time family members may hae to apply to the Surrogate Court for an
allowance!
$ragmentation + ,eal Estate
)f you own real property in more than one state, probate rules must be followed
in each state in which real property is located! "he cost and time may be increased!

,EV'C-.%E %)V)/0 ",1S"
- ,eocable %iing "rust is a legal deice that allows you to maintain complete
control oer your assets and -V')(S P,'.-"E!
.ecause there is no probate of a %iing "rust, your priate financial matters
remain priate, there are no probate costs, no long delays and loss of control, and no
fragmentation of the estate! 2oweer, since you still control the trust, it cannot shield
assets from /ursing 2ome, #edicaid or Estate "axes! "o do that, you will need to hire
an attorney to prepare an )rreocable "rust! $ees exceed 34,555!
6ou #aintain Complete Control 'er 6our Property )n a ,eocable %iing "rust
"he principle behind a ,eocable %iing "rust is simple! When you establish a
%iing "rust, you transfer all your property into the "rust, and then name yourself as
trustee, or you can name you and your spouse as co+trustees of the "rust! "he trustees
maintain complete control oer the property, the same control you had before your
property was placed in trust 6ou can buy, sell, borrow, pledge, or collaterali7e the trust
property! 6ou can een discontinue the "rust if you choose! "hat is why it is called a
8,eocable8 %iing "rust! We will explain the 8)rreocable "rust8 at the end of the
article!
"ransferring Property )nto the ,eocable %iing "rust
"he transfer of title to property into the "rust is a relatiely simple matter!
-nywhere you hae assets, you will get help in transferring your property into the "rust!
6our attorney, securities inestor, etc!, will proide you with assistance needed to
transfer your property into your ,eocable %iing "rust! 6our attorney will proide the
information and assistance you need to properly fund your "rust!
Complete Priacy
Probate records are public, your ,eocable "rust documents are priate! -
,eocable %iing "rust will safeguard the priacy of your family and your priate
financial matters!
/aming - "rustee
#ost people name themseles and their spouse as the initial "rustees of their
"rust! "his is usually true unless one spouse is incapacitated to the point that he or she
is not able to manage your assets in the same way you do now!
0ifts "o ,eligious -nd Charitable 'rgani7ations
#any people wish to gie a portion or sometimes all of their assets to a religious
or charitable organi7ation in order to carry on the wor& of those organi7ations that hae
gien them comfort or peace of mind during their lifetimes! "his is easily accomplished
with a ,eocable %iing "rust!
#arital "ax (eductions
$ederal estate taxes must be paid on any estate worth more than 34,955,555 in
:55; beginning at a tax rate of 4<=! 6our estate includes not only the current alue of
your real estate, but also the face alue of any life insurance policies, pension or
retirement benefits, ),- accounts, ban& accounts, stoc&s and bonds, etc! When you
add these all together, and subtract your debts, your might hae imagined!
Current $ederal tax laws allow you to leae an unlimited amount to a spouse,
tax+free! When your spouse dies, the estate is entitled to a 39,555,555 in :55; tax
exemption! "he first 39,555,555 in :5>> goes to your beneficiaries free of estate tax!
- ,eocable %iing "rust can easily be structured to automatically create
separate "rusts upon the death of either your spouse! 2ere?s how it wor&s! )f the wife
dies first, the husband has total control of his "rust! -lso, for the remainder of his life, he
receies all income from her "rust and has the use of the assets wheneer needed for
liing expenses! When he dies, each "rust will claim its tax exemption, and some will
go tax+free to their children, or any other beneficiary they designate, without haing to
go through probate!
http@AAwww!njlaws!comAtrustBBBwills!htm
(efinition
- trust, which cannot be changed or canceled once, it is set up without the consent of
the beneficiary! contributions cannot be ta&en out of the trust by the grantor! )rreocable
trusts offer tax adantages that reocable trusts don?t, for example by enabling a person
to gie money and assets away een before heAshe dies! opposite of reocable trust!
)rreocable "rust -ccounts B)rreocable trust accounts are deposits held by a trust
established by statute or a written trust agreement in which the grantor Cthe creator of
the trust + also referred to as a trustor or settlorD contributes deposits or other property
and gies up all power to cancel or change the trust!
-n irreocable trust also may come into existence upon the death of an owner of a
reocable trust! "he reason is that the owner no longer can reo&e or change the terms
of the trust! )f a trust has multiple owners and one owner passes away, the trust
agreement may call for the trust to split into an irreocable trust and a reocable trust
owned by the surior! .ecause these two trusts are held under different ownership
types, the insurance coerage may be ery different, een if the beneficiaries hae not
changed!
-oid #edicaid and nursing home liens by settling up an irreocable trust and
waiting E5 months to apply for #edicaid!
W2-" )S #E()C-)(!!!!!!!!!!
#edicaid is a $ederal medical bills assistance program that pays medical bills for
eligible, needy persons! )t is administered by each state! -ll payments are made directly
to the proiders of medical and other health care serices! "he #edicaid+eligible person
does not pay the health care proider for serices! "he only exception is a patient in a
#edicaid+approed nursing facility who may be re*uired to contribute part of hisAher
income toward the cost of care!
#edicaid typically has a lien on assets you own!
- federal court has ruled that assets held in irreocable trusts should not be
factored into determinations of #edicaid benefit eligibility in a major ictory seniors and
others faced with difficult financial and healthcare issues!
)rreocable trusts with limited power of appointment hae long been a common
estate+planning tool!
Kenneth -! Vercammen is an Edison, #iddlesex County, /F trial attorney who
has published>:9 articles in national and /ew Fersey publications on business and
litigation topics! 2e often lectures to trial lawyers of the -merican .ar -ssociation, /ew
Fersey State .ar -ssociation and #iddlesex County .ar -ssociation!
2e is a highly regarded lecturer on litigation issues for the -merican .ar -ssociation,
)C%E, /ew Fersey State .ar -ssociation and #iddlesex County .ar -ssociation! 2is
articles hae been published by /ew Fersey %aw Fournal, -.- %aw Practice
#anagement #aga7ine, and /ew Fersey %awyer! 2e is the Editor in Chief of the /ew
Fersey #unicipal Court %aw ,eiew! #r! Vercammen is a recipient of the /FS.-+ 6%(
Serice to the .ar -ward!
2e has sered as a Special -cting Prosecutor in nine different cities and
towns in /ew Fersey and also successfully handled oer 'ne thousand #unicipal Court
and Superior Court matters in the past >G years!
)n his priate practice, he has deoted a substantial portion of his professional time to
the preparation and trial of litigated matters! 2e has appeared in Courts throughout
/ew Fersey seeral times each wee& on Criminal personal injury matters, #unicipal
Court trials, and contested Probate hearings! 2e seres as the Editor of the popular
legal website www!njlaws!com
KE//E"2 VE,C-##E/ H -SS'C)-"ES, PC
-""',/E6 -" %-W
:594 Woodbridge -e!
Edison, /F 5GG><
CPhoneD <4:+9<:+5955
C$axD <4:+9<:+5545
website@ www!njlaws!com
www!CentralFerseyElder%aw!com