What are the advantages of putting assets into a trust?

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Q. What are the advantages of putting assets into a trust?
— Planning

A. A revocable trust can be useful in managing your assets.

While you are competent you can act as trustee, alone or with another as co-trustee.

When you no longer wish to manage, or when you are no longer capable of managing your affairs, your co-trustee or a successor trustee can assume all of the duties, said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.

If you did not place your assets into a revocable trust, you would need to appoint an agent under a durable power of attorney to handle your financial affairs, she said, noting that some financial institutions prefer to do business with a trustee instead of an agent under a power of attorney.

Upon your death, if all of your assets are in trust, probate is avoided and the trustee continues to manage your assets pursuant to the terms of the trust document which does not need to be recorded in the surrogate’s office, she said.

“Thus, unlike a will, which is recorded in the surrogate’s office once it is probated, the trust is not a public document,” she said. “The privacy aspect of the trust is another advantage.”

Finally, she said, where a New Jersey inheritance tax return is required, a revocable trust also avoids the need to obtain tax waivers, which are issued by the New Jersey Division of Taxation to release any tax liens, upon death.

There are some negatives to putting assets into a trust.

For starters, the cost of creating a trust which is greater than that of a will, and you would still need a will in case you failed to put everything into the trust, she said.

Also, sometimes, having all of your assets in trust can be more costly or cumbersome. For example, insurance may cost more when the asset is in the trust, she said.

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This story was originally published on March 17, 2021.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.