Many residents in New Jersey concerned about estate planning have probably heard the related term asset protection planning. Asset protection planning is, despite the myth, not only for the rich and famous. Many traditional state planning tools can be used for individuals in the middle class to increase the asset protection available to the surviving spouse, beneficiaries, and children.
One of the most important tools available to New Jersey residents involved in the estate planning process is known as a discretionary trust. This trust allows the trustee the authority to determine when and whether distributions are made to a beneficiary. This is especially helpful if you are concerned about assets being passed on to your children could be subject to claims by creditors. Since the beneficiary cannot force the trustee to distribute assets, creditors are not eligible to do this either.
The discretionary trust is a valuable tool that can help protect your assets from the claims of creditors of your children or other beneficiaries. It is most appropriate to use this kind of trust when you believe that the trustee will act in accordance with the guidelines and wishes that you establish for the trust.
If you are a parent, using this kind of trust can also be beneficial for ensuring that your loved one does not spend the money too quickly. As illustrated, a discretionary trust can help you accomplish multiple goals at once. Protecting your assets for multiple generations can be done with just a little bit of guidance regarding estate planning for New Jersey residents.