Older Americans sometimes delay their estate planning for far too long. This can backfire on them — and even more so on their surviving spouses and any dependent children.
You want to do the right thing for your heirs and beneficiaries, but in these uncertain times, you hesitate to put all your assets into an irrevocable trust. You never know when you might need that liquidity.
Reversible trusts provide protection — and flexibility
Many circumstances could dictate the need for a change in estate plans. Divorces, deaths, illnesses, addictions and many other unaddressed complications can develop after you believe you have finished your estate planning.
Revocable trusts, which are often referred to as reversible trusts are financial instruments that the trust grantor (you) can revoke or amend during their lifetimes.
What assets become part of these trusts?
Trust grantors can include all types of assets in revocable trusts. Automobiles, antiques and collectibles, real estate, life insurance policies and even your personal jewelry can go into the trust you fund during your lifetime.
Should you need to liquidate those assets for any reason, they are available. But that is a double-edged sword to this estate-planning solution. If you were to fall on hard times and need to file bankruptcy, those assets could be seized. They are also subject to seizure in a court judgment or settlement if you are a defendant and the plaintiff prevails.
The main takeaway
Estate planning is a complex undertaking. Most people need guidance and advice as they embark on their estate planning experience. Learning all you can about New Jersey’s laws regarding estate planning can help you explore your options.