When you set up a trust fund in New Jersey, it gives you an opportunity to pass down valuable assets to your beneficiaries. Trust funds are an estate planning vehicle that can help you manage your assets and avoid certain estate taxes down the road. There are different types of funds that you or an attorney can set up.
A trust fund involves three categories of people. These include the grantor, trustee and beneficiary. If you are setting up a trust fund, you are the grantor. Your role is to establish and place assets in the fund. A beneficiary is anyone who receives financial payments from the fund. A trustee oversees, manages and distributes funds on your behalf. According to The Motley Fool there are several trust fund types such as revocable and irrevocable trusts. For instance, you function as the trustee with a revocable living trust.
You can fund a trust with a wide range of assets. These include money, stocks, bonds and real estate. There is flexibility in how you fund the trust. For example, you can place money in it annually or fund it with a lump sum amount of cash. Additionally, you determine how much money you want in the fund.
You can distribute the trust fund assets to anyone you choose. For instance, you can leave the trust to your children or grandchildren. One common practice is to make the funds available for specific purposes, such as paying for college. The bottom line is that you determine how and under what circumstances your beneficiary can use the funds.
This is general information only and is not intended to provide legal advice.