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Revocable living trusts and privacy

New Jersey residents have a right to privacy during their lives. They are not obligated to publically share details about their lives or their finances, in most situations. However, does this same right to privacy exist in death?

The answer may depend on a person's estate plan. If a person relies on a will to distribute assets following the person's death, then the person's privacy could be at risk. In cases where people only have a will, or have no estate plan at all, the New Jersey probate court must step in and resolve the case. Probate cases are not private and are matters of public record. Therefore, neighbors, relatives and other nosey individuals can learn private details about a person's finances and estate.

One way to avoid probate, and keep privacy intact, is to set up a revocable living trust. A trust is an estate planning tool where an entity is created for the benefit of chosen beneficiaries. The person who creates the trust also picks a trustee to administer the trust's assets to the beneficiaries. In cases where people create a revocable trust, they can avoid probate - and its expenses - when they pass. Therefore, the person's assets - which have been transferred to the trust - are kept private from the general public.

Furthermore, revocable trusts can help to reduce the number of estate taxes owed by people's estates following their death. In New Jersey, estates with more than $675,000 in assets are subject to estate taxes. By using a trust, people can avoid some of these taxes and protect their family's future.

Revocable trusts are just one of the many estate planning tools that are available for New Jersey residents. People should make sure they understand all their options when creating an estate plan so that they can best protect their assets and their privacy.

Source: Palm Beach Daily News, "Need a revocable living trust?," Gail Liberman, April 27, 2014

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