Donnelly Ritigstein Law Offices
Call for a Free Consultation
Toll Free 866-907-6368 Local 856-324-6147

How do testamentary trusts compare to living trusts?

The myriad of trusts out there, such as asset protection trusts, special needs trusts, spendthrift trusts and Totten trusts, can be overwhelming to those in New Jersey who do not have much estate planning knowledge or experience. However, trusts can be broken down into two basic categories that may make them easier to understand.

In general, there are two umbrellas that trusts will fall under: inter vivos trusts and testamentary trusts. In a testamentary trust, the assets are placed in the trust once the creator of the trust passes away.

But, a testamentary trust is not automatic. Instead, it is usually specified as a provision of the person's will. But, because of this, the assets will be subjected to the probate process. Therefore, for example, a person's will would state that once she dies her property should be transferred to the trustee.

An inter vivos trust -- also known as a living trust -- takes effect during the creator's lifetime, and can be written in a way so that it continues after the creator dies. If the entire creator's property is to transfer to the trust upon the creator's death, it will not be subject to the probate process. Living trusts can be made revocable, meaning that the creator of the trust can alter the trust terms, or they can be made irrevocable, which cannot be changed.

This is only a brief overview of trusts in New Jersey. There are many specific types of trusts that fall under these categories. Those in New Jersey who are contemplating creating a trust should make sure they understand all their options before proceeding.

Source: FindLaw.com, "Trusts: An Overview," accessed on Dec. 3, 2016

No Comments

Leave a comment
Comment Information

Moorestown Office
212 West Route 38
Suite 200
Moorestown, NJ 08057

Map & Directions

Haddonfield Office
132 Kings Highway E
Suite 105
Haddonfield, NJ 08033

Map & Directions

Linwood Office
327 Central Avenue
Linwood, NJ 08221

Map & Directions

Cape May Court House Office
618 Route 9 South
Cape May Court House, NJ 08210

Map & Directions

Gloucester, Cumberland and Salem County Offices
57 Euclid St.
Woodbury, NJ 08096

Map & Directions

Back To Top