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Making sure New Jersey residents trust their estate plan

New Jersey residents are no doubt aware of the late Lou Reed -- the lead vocalist and guitarist for 'The Velvet Underground.' Reed passed away from liver disease in October 2013 and left behind an estate worth more than $30 million. The administration of this grand estate has taken his executors and loved ones on a bit of wild ride.

Mr. Reed signed a will in April of 2012 that was 34 pages in length. According to the will, there are $10 million in assets that are designated for Reed's wife and sister. Additionally, there is $500,000 left for Reed's sister to use in her discretion for the care of their elderly mother. Reed's wife and sister will receive 75 percent and 25 percent respectively of the residual estate. With so many assets floating around, many are curious as to why an individual with such a large estate would rely solely on a will, as opposed to having a revocable trust in place.

One of the key differences between a will and a trust is that a will must pass through probate in order to be effective. This is a public process. Media outlets are free to print stories about who is getting what and any other details about the estate they wish. On the other hand, trusts can be constructed in order to avoid probate entirely.

In addition to the lack of privacy afforded by the probate process, it can also be very time consuming, costly and more prone to objections and fighting amongst the heirs. Living trusts -- or inter vivos trust -- can provide an individual the opportunity to provide a comprehensive estate plan, filled with suggestions, conditions and limitations. This trust can be amended very easily and amended by the individual to be in alliance with their wishes and desires as new events unfold.

New Jersey individuals want to ensure their loved ones are protected and taken care of after their passing. It can sometime be a difficult topic, but it is something that should be examined.

Source: Forbes, "Lou Reed Walked On The Wild Side With His Estate Planning," Danielle and Andy Mayoras, July 10, 2014

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