Irrevocable Trusts Attorney
Irrevocable Trusts Attorneys in New Jersey
What is an Irrevocable Trust?
01.
What is an Irrevocable Medicaid trusts?
Irrevocable Medicaid trusts are one of the most important types of irrevocable trusts. Medicaid asset protection trusts help New Jersey residents protect their assets and become eligible for Medicaid at the same time. When applicants apply for Medicaid, they cannot own assets above the low minimum asset level. Medicaid trusts allow individuals to transfer assets into an irrevocable trust. The assets in the irrevocable Medicaid trust will not exclude the applicant from receiving long-term care benefits from Medicaid.
02.
How Does an Irrevocable Trust Work?
03.
Can You Change an Irrevocable Trust in New Jersey?
In some cases, someone would like to modify or revoke an irrevocable trust. Typically, modifying an irrevocable trust requires a court order from a New Jersey court. Courts seek to protect beneficiary rights when it comes to irrevocable trusts. The Uniform Trust Code adopted by New Jersey has greatly simplified the process of amending a trust. Modifying or amending a trust requires a court order or the consent of all parties involved through a Non-Judicial Settlement Agreement (NJSA). To obtain court approval, you must file an order to show cause. Part of the process is giving notice to all of the interested parties. You must convince the New Jersey court that modifying the irrevocable trust is appropriate in your situation. The process of amending an irrevocable trust is often expensive and can result in some delays.
The other option for modifying the irrevocable trust is to get the consent of all of the parties involved. The creator or grantor of the trust and all of the trust beneficiaries must agree to the change to the irrevocable trust. Irrevocable trusts are focused on beneficiary rights. The sole purpose of the trust is to make sure that beneficiary rights are protected. When the modification is in opposition to the main purpose of the irrevocable trust, you may not be able to modify the trust. Non-Judicial Settlement Agreements can only be applied to trusts that are not charitable.
You must convince the New Jersey court that modifying the irrevocable trust is appropriate in your situation. The process of amending an irrevocable trust is often expensive and can result in some delays.
The other option for modifying the irrevocable trust is to get the consent of all of the parties involved. The creator or grantor of the trust and all of the trust beneficiaries must agree to the change to the irrevocable trust. Irrevocable trusts are focused on beneficiary rights. The sole purpose of the trust is to make sure that beneficiary rights are protected. When the modification is in opposition to the main purpose of the irrevocable trust, you may not be able to modify the trust. Non-Judicial Settlement Agreements can only be applied to trusts that are not charitable.
04.
How Much Does it Cost Create an Irrevocable Trust?
05.
Can You Dissolve, Revoke, or Terminate an Irrevocable Trust?
What happens when the grantor of the trust wants to dissolve or terminate an irrevocable trust? When a grantor creates an irrevocable trust, the grantor loses his or her right to revoke the trust. The trustees, not the grantor, are in charge of managing the assets of the trust. The assets are owned by the irrevocable trust itself, not the grantor, and are managed by the trustees. Nonetheless, the grantor can revoke an irrevocable trust in some specific circumstances. New Jersey adopted the Uniform Trust Code which allows grantors to revoke an irrevocable trust but only when the trustee and beneficiaries all agree to revoke the trust.
What Does an Irrevocable Trust Mean?
The term irrevocable trust refers to a trust that the grantor cannot change, except under narrow legal circumstances. Trusts are often thought of as alternatives to a will. The grantor or settlor places his or her assets into the trust. Each trust comes with its own rules and regulations, as found in the trust agreement. The trust agreement lays forth how the grantor or creator of the trust would like their assets to be distributed to their appointed beneficiaries. Irrevocable trusts cannot be revoked except in rare circumstances, and with court approval when all of the interested parties agree. While irrevocable trusts can be extremely beneficial, they also come with some potential downsides. For example, when a grantor moves significant assets into a revocable trust, the grantor cannot access those assets.
An unexpected circumstance or financial need could arise that requires payment of a large sum. In this situation, the creator of the trust would not be allowed to access the funds in the irrevocable trust and use them to pay the bill. Once the trust owns the assets, the creator of the trust can no longer access or use those assets.
Can You Amend an Irrevocable Trust?
Amending an irrevocable trust is much more challenging than amending a revocable trust. The appropriate method for modifying a trust varies depending on the situation. The terms of the trust agreement, the length of irrevocability, the identity of any trust beneficiaries, and the governing laws of the state will all influence how easy it is to amend the trust. Amending an irrevocable trust may not be the best choice, depending on the circumstances.
If you are interested in amending an irrevocable trust, speaking with a skilled lawyer can be helpful. At Giro, LLP, Attorneys at Law, our estate planning lawyers have in-depth knowledge when it comes to irrevocable trusts. After evaluating your circumstances, we can advise you as to whether or not you should amend the trust. If so, we can help you attempt to amend the irrevocable trust through court order or through receiving the consent of all interested parties, including the creator of the trust, the trustee or trustees, and the beneficiaries.
Are Irrevocable Trusts Taxable?
One of the key benefits of creating an irrevocable trust is to avoid taxes. The irrevocable trust itself owns the assets in the trust, not the descendants of the creator of the trust. Thus, when the creator of the trust dies, the descendants will not need to pay taxes. Those who create an irrevocable trust can avoid capital gains taxes. When the assets are already owned by the irrevocable trust, they are not subjected to capital gains taxes.
When you create a regular will, the beneficiaries of your will are subject to paying estate taxes when they inherit the property upon your debt. In some unfortunate situations, the beneficiaries of your assets may have difficulty paying inheritance taxes. Placing your assets into an irrevocable trust will help make sure that your beneficiaries will not face the hardship of paying extensive taxes after your death. Creating an irrevocable trust will help you ensure that your loved ones are looked after in the event of your death and reduce your worry about what will happen to your assets after you pass away.
Our Attorneys
Maurice Giro
Managing Member
Mr. Giro takes a compassionate approach to estate planning and elder lawmatters and takes the time to truly understand his clients’ situation and goals…
Andrea M. Beckford
Attorney
Andrea M. Beckford, Esq. is an alumna of Le Moyne College in Syracuse, New York, where she graduated cum laude with a Bachelor’s in Psychology and a Minor in Legal Studies…
Lawrence D. Eichen
Attorney
Andrea M. Beckford, Esq. is an alumna of Le Moyne College in Syracuse, New York, where she graduated cum laude with a Bachelor’s in Psychology and a Minor in Legal Studies…
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Our Experienced Estate Planning Lawyers can Help
At Giro, LLP, Attorneys at Law, our lawyers understand the many benefits of creating a trust. We have the skills and experience necessary to draft well-written trusts that benefit our clients and their families for decades or years to come. Our River Edge, New Jersey, trust lawyers can help you determine whether or not you should add an irrevocable trust to your estate plan. We focus our work on helping our clients achieve their estate planning goals. We will help you understand the benefits of creating an irrevocable trust, both during your life and after you pass away. Contact our irrevocable trust creation law firm today to schedule your initial consultation.
