Paul R. Tierney Law

What Exactly Is a Trust?

“A trust is a legal vehicle that allows a third party, a trustee, to hold and direct assets in a trust fund on behalf of a beneficiary. A trust greatly expands your options when it comes to managing your assets, whether you're trying to shield your wealth from taxes or pass it on to your children.”

MSN Money’s recent article entitled “What is a trust?” explains that many people create trusts to minimize issues and costs for their families or to create a legacy of charitable giving. Trusts can be used in conjunction with a last will to instruct where your assets should go after you die. However, trusts offer several great estate planning benefits that you don’t get in a last will, like letting your heirs to see a relatively speedy conclusion to settling your estate.

Working with an experienced estate planning attorney, you can create a trust to minimize taxes, protect assets and spare your family from going through the lengthy probate process to divide up your assets after you pass away. A trust can also let you control to whom your assets will be disbursed, as well as how the money will be paid out. That’s a major point if the beneficiary is a child or a family member who doesn’t have the ability to handle money wisely. You can name a trustee to execute your wishes stated in the trust document. When you draft a trust, you can:

• Say where your assets go and when your beneficiaries have access to them
• Save your beneficiaries from paying estate taxes and court fees
• Shield your assets from your beneficiaries’ creditors or from loss through divorce settlements
• Instruct where your remaining assets should go if a beneficiary dies, which can be helpful in a family that includes second marriages and stepchildren; and
• Avoid a long probate court process.

One of the most common trusts is called a living or revocable trust, which lets you put assets in a trust while you’re alive. The control of the trust is transferred after you die to beneficiaries that you named. You might want to ask an experienced estate planning attorney about creating a living trust for several reasons, such as:

• If you’d like someone else to take on the management responsibilities for some or all of your property
• If you have a business and want to be certain that it operates smoothly with no interruption of income flow, if you die or become disabled
• If you want to shield assets from the incompetency or incapacity of yourself or your beneficiaries; or
• If you want to decrease the chances that your will may be contested.

A living trust can be a smart move for those with even relatively modest estates. The downside is that while a revocable trust will usually keep your assets out of probate if you were to die, there still will be estate taxes if you hit the threshold.

By contrast, an irrevocable trust can’t be changed once it’s been created. You also relinquish control of the assets you put into the trust. However, an irrevocable trust has a key advantage in that it can protect beneficiaries from probate and estate taxes.

In addition, there are many types of specialty trusts you can create. Each is structured to accomplish different goals. Ask an experienced estate planning attorney about these.

Reference: MSN Money (July 9, 2021) “What is a trust?”

Who Is Afraid to Die?

Researchers at Oxford University have discovered what might be somewhat surprising findings about what types of people are the least afraid of passing away.

One of the reasons that people put off estate planning is they are afraid to die. Most people do not think that they will hasten their own deaths by planning for their estates.  However, that was a common superstition in the distant past.

Estate planning makes people think about what will happen after they pass away. For many people, that leads to think about the act of death itself, and they are deathly afraid of it. Unfortunately, that causes some people to delay estate planning for too long and they pass away without estate plans.

Oxford University researchers have analyzed what types of people are the most and least afraid of dying.

The “least afraid” list includes those people who are extremely religious and, interestingly enough, atheists. The analysis shows that those on the “most afraid” of death list are those people who are mildly religious and who may only join a religious group for social and economic reasons.

The Daily Mail reported these findings in "How afraid are YOU of dying? Researchers say atheists and the most religious are the least scared."

Of course, people cannot act on this information to make themselves have less fear of death. It is difficult to force yourself to be more or less religious than you are.

However, those who have put off estate planning due to a fear of passing away, can use this information to understand that their fear is normal. That in and of itself might help some overcome their fear long enough to do the necessary estate planning.

Reference: Daily Mail (March 24, 2017) "How afraid are YOU of dying? Researchers say atheists and the most religious are the least scared."

Is Cremation an Option?

One of the often smaller, but still important, goals of estate planning is to make sure that money is available to dispose of a deceased's remains. That requires thinking about what type of funeral you want and whether you want to be cremated or buried.

The U.S. has always been a country with a Christian majority. As a result, the normal practice for disposing of a deceased's remains has been by burial in a cemetery.

However, it is becoming increasingly expensive to have a full funeral and burial. So much so that many people have a difficult time figuring out how to make sure their families will have enough cash on hand to pay for their funerals.

Cemeteries and funeral homes have long let people pre-pay, of course, but that is still expensive and there are often still other expenses to pay later. This has led to a rise in the number of people choosing to be cremated, as Financial Advisor reports in "Social Stigma of Cremation Going Up in Smoke."

Cremation is normally a much cheaper option than a burial service. However, it is still important to shop around and make sure you are receiving a good price with a reputable company. Prices and service can vary greatly between companies.

Your estate planning attorney can help you ensure there is enough cash set aside in your planning to make sure your family will not be burdened with funeral expenses whether you decide on cremation or a burial.

Reference: Financial Advisor (Oct. 11, 2016) "Social Stigma of Cremation Going Up in Smoke."

Religious-Based Disinheritance Allowed in New Jersey

There are very few restrictions on people’s ability to disinherit a child. Sometimes courts will not allow the disinheritance if the reasons for it are against the strong public policy of the state. A court in New Jersey has made clear that religious discrimination is not a reason to disallow a disinheritance in that state.

In 1987, New Jersey man Kenneth Jameson drafted a will which specifically disinherited his daughter Stacy Wolin. According to the will, the reason for the disinheritance was her selfish, manipulative, cruel and abusive behavior. Jameson passed away in 2014 and the daughter has been attempting to get the courts to disregard the disinheritance.

She claims the real reason she was disinherited is that her Catholic parents objected to her dating a Jewish man in college. She later married the man, presumably against her parents’ wishes.

The Associated Press reports that a New Jersey appellate court has ruled against Wolin in “Appeal denied for daughter disinherited from father's will.”

The court ruled that New Jersey’s anti-discrimination laws do not disallow a discriminatory disinheritance. It decided that courts are required to uphold wills even if they are contrary to the principles of justice and humanity as long as the person drafting the will was competent to do so.

It is not known whether Wolin plans to appeal the decision to a higher court.

The laws on disallowing a disinheritance or other will provisions as against public policy vary from state to state and are normally decided on an ad hoc basis by courts when specific issues are raised.

Reference: Associated Press (Aug. 14, 2016) “Appeal denied for daughter disinherited from father's will.”