A revocable living trust can be a useful estate planning tool for New Jersey families who want a more organized way to manage assets during life and transfer property at death. When properly drafted and funded, it can also help address privacy, administration, and incapacity concerns.
At The Matus Law Group, New Jersey living trust lawyer Christine Matus helps individuals and families throughout Monmouth County create revocable living trusts tailored to their unique estate planning goals. Our estate planning attorneys guide clients in putting the proper documents and funding strategies in place so their trusts can function as intended during life and after death.
This guide explains the key decisions involved in creating a revocable living trust in New Jersey, including trustee selection, incapacity planning, trust funding, and related estate planning documents. Call The Matus Law Group at (732) 785-4453 to schedule a consultation.
What Is a Revocable Living Trust in New Jersey?
A revocable living trust involves three roles: the grantor (the person who creates the trust), the trustee (the person who manages the trust assets), and the beneficiaries (the people who receive the trust assets). In most cases, you serve as both the grantor and the trustee during your lifetime, retaining full control over everything in the trust. You also name a successor trustee to take over management if you become incapacitated or after you pass away.
New Jersey’s Uniform Trust Code, codified at N.J.S.A. 3B:31-1 et seq., governs the creation and administration of trusts in the state. Under this law, you can amend, revoke, or dissolve your revocable living trust at any time during your lifetime, as long as you have legal capacity to do so.
How Is a Revocable Trust Different from an Irrevocable Trust?
A revocable living trust lets you keep control over your assets and change the trust terms during your lifetime. An irrevocable trust is generally much harder to change than a revocable trust. In some circumstances, however, New Jersey law allows modification or termination with the required consents or by court order.
Do NJ Residents Still Need Probate Without a Trust?
New Jersey has a small-estate affidavit procedure for certain intestate estates. If a person dies without a will and the estate does not exceed $50,000, a surviving spouse, civil union partner, or domestic partner may collect the assets by affidavit under N.J.S.A. 3B:10-3. If the person dies without a will, leaves no surviving spouse or partner, and the estate does not exceed $20,000, an heir may use a similar affidavit procedure under N.J.S.A. 3B:10-4.
Even with New Jersey’s relatively streamlined probate process, a revocable living trust may still offer important benefits. Unlike probate, trust administration is generally private, and a trust may be especially useful for families with out-of-state property, business interests, or specific planning goals.
Tip 1: Include Out-of-State Property in Your Trust
If you own property in more than one state, putting it in your revocable trust can help your family avoid having to open an estate in several states. When someone passes away owning real estate in another state, the family must open a separate probate proceeding, known as ancillary probate, in that state. Each ancillary proceeding often requires working with an attorney, paying filing fees, and waiting for that state’s process to conclude. Transferring out-of-state property into your revocable trust can help your family avoid ancillary probate, provided the property is properly retitled to the trust.
Tip 2: Choose the Right Successor Trustee in New Jersey
While you are alive, you will serve as the trustee of your own trust, retaining complete control over your assets. After you pass, someone you name (the successor trustee) will distribute and manage the trust assets as you designate.
When selecting a successor trustee, you have two main options: an individual trustee or an institutional trustee. An individual trustee is typically a family member or close friend who knows your values and family dynamics. An institutional trustee, such as a bank or trust company, offers professional management and impartiality but charges ongoing fees. Some families name a trusted individual as successor trustee with an institutional trustee as a backup.
Consider the following qualities when choosing your successor trustee, as each plays an important role in how effectively your trust is administered:
- Organizational skills and attention to detail
- Financial literacy and comfort managing investments
- Willingness to serve and availability to handle ongoing responsibilities
- Trustworthiness and ability to remain impartial among beneficiaries
- Proximity to your beneficiaries or willingness to coordinate with local professionals
You should also name at least one alternate successor trustee in case your first choice is unable or unwilling to act when the time comes. Having a named alternate avoids delays and potential court involvement if your primary choice cannot serve.
Should Married Couples Consider a Joint Living Trust?
Married couples in New Jersey often face the question of whether to create one shared trust or two separate trusts. A joint revocable living trust holds both spouses’ assets in a single trust, simplifying administration while both spouses are alive. Separate trusts may make more sense when spouses have children from prior relationships, significant separate property, or different estate planning goals.
Tip 3: Include a Clear Incapacity Clause in Your Trust
Your revocable living trust can authorize a successor trustee to step in and manage trust assets upon your incapacity, after a stated trigger, such as written physician certification. While this can help avoid court involvement over trust property, you still need separate documents, such as a durable power of attorney and an advance directive, for matters outside the trust.
Without an incapacity clause, your family may need to petition a New Jersey court for guardianship over your financial affairs, which is a public, time-consuming, and expensive process. The incapacity clause should clearly define what constitutes incapacity and who has the authority to make that determination. Most trusts require a written certification from one or two licensed physicians, protecting you from premature removal as trustee while still allowing a smooth transition when needed.
Key Takeaway: An incapacity clause allows your successor trustee to manage trust assets if you become unable to do so, without the need for court intervention. You still need a durable power of attorney and health-care directive for assets and decisions that fall outside the trust.
Living Trust Attorney in New Jersey, The Matus Law Group
Christine Matus, Esq.
Christine Matus, Esq. is a New Jersey estate planning attorney with decades of experience in estate planning, elder law, special needs planning, and related matters. Christine is active in both the legal profession and the local community. She serves on a District Fee Arbitration Committee and has served in board and leadership roles with 21 Plus, MOCEANS, Inc., and the Ocean County Bar Association.
She has also lectured on special needs planning, real estate matters, and nonprofit rules and regulations, and has co-authored articles including ‘Nursing Home Bill of Rights’ and ‘OBRA 1993: The Omnibus Reconciliation Act of 1993.’ Her professional background also includes mediation work and prior service with the District IIIA Ethics Committee.
Tip 4: Fund Your New Jersey Living Trust with the Right Assets
Choosing which assets to place in your revocable living trust is a key part of making the plan work as intended. While POD/TOD designations may help certain accounts avoid probate, they do not address incapacity in the same way a trust can. If incapacity planning is also a priority, retitling appropriate non-retirement assets to the trust may offer more complete protection.
What Assets Belong in Your Trust?
Assets commonly placed in a New Jersey revocable living trust include real estate, non-retirement bank and brokerage accounts, taxable investment accounts, and some valuable personal property, such as collections. Business interests and LLC memberships may also be assigned to the trust, subject to any governing agreement or transfer restrictions.
What Assets Should Stay Out of Your Trust?
Do not retitle your IRA, 401(k), or 403(b) into a trust. These retirement accounts must remain in your name and pass at death through beneficiary designations. In some cases, you may name a trust as beneficiary for added control, but the distribution rules should be reviewed carefully.
Health Savings Accounts (HSAs) also should not be retitled into a trust because they are tax-advantaged accounts tied to a specific individual under IRS rules. They pass at death through designated beneficiaries.
For vehicles in New Jersey, you may use a Transfer on Death (TOD) designation through the Motor Vehicle Commission so the vehicle passes outside of probate. Life insurance may also name a trust as beneficiary if you want centralized control of funds for minors or blended-family planning.
How Do You Actually Fund a Revocable Living Trust in NJ?
To fund properly, titles must change. Record a new deed for real estate and sign bank or brokerage forms to move nonretirement accounts into the trust. Institutions may ask for a certification of trust. If a beneficiary receives means-tested public benefits, beneficiary designations and trust planning should be reviewed carefully with counsel. In some cases, a properly drafted Special Needs Trusts (SNTs) may help preserve Medicaid eligibility under 42 U.S.C. § 1396p(d)(4) and applicable New Jersey eligibility rules. Completing these steps correctly helps your trust function as intended and reduces the risk of gaps in coverage.
The table below summarizes which assets typically belong inside or outside a revocable living trust, giving you a quick reference for your planning conversations with an attorney.
| Asset Type | Place in Trust? | Recommended Action |
|---|---|---|
| Primary residence and other real estate | Yes | Record a new deed transferring title to the trust |
| Non-retirement bank and brokerage accounts | Yes | Complete institution transfer forms to retitle |
| CDs and taxable investment accounts | Yes | Retitle to trust name through the institution |
| Business interests and LLC memberships | Yes | Execute an assignment of interest to the trust |
| Valuable personal property (collections, art) | Yes | Assign via a schedule attached to the trust |
| IRAs, 401(k)s, 403(b)s | No | Keep in your name; use beneficiary designations |
| HSAs | No | Must remain individually owned; use beneficiary designations |
| Vehicles | Optional | Use NJ TOD beneficiary designation if appropriate |
Key Takeaway: Retitling assets and coordinating beneficiary designations help the plan function the way you intend.
Tip 5: Understand FDIC Insurance for New Jersey Trust Accounts
On April 1, 2024, the FDIC simplified deposit insurance by creating a new “Trust Accounts” category, which includes payable-on-death (POD/TOD) accounts, living trusts, and irrevocable trusts. For each trust owner, deposits across all their trust accounts at a single bank are now aggregated. Insurance is calculated at $250,000 per eligible beneficiary, with total coverage for that owner’s trust deposits capped at $1,250,000. This maximum is reached when five or more beneficiaries are named. Name only the real, eligible beneficiaries you intend to benefit; adding more than five will not raise coverage above the $1,250,000 limit.
Do You Need a Will If You Have a Living Trust in NJ?
Yes, you still need a will even if you have a revocable living trust. A pour-over will acts as a backup for assets that were not transferred into your trust during your lifetime. It directs those assets into the trust through probate so they can be distributed according to the trust’s terms.
There are three main reasons to have a will alongside your trust, and each addresses a gap that a trust alone cannot fill:
- Naming a guardian for minor children. You cannot use a trust to designate a guardian for your minor children. A will is the only legal document that allows you to make this designation in New Jersey.
- Catching unfunded assets. If you acquire new property or open a new account and forget to title it to your trust, the pour-over will help those assets still reach your intended beneficiaries.
- Directing specific personal property. Some items of personal property may not be formally assigned to the trust. A will can address these items directly.
Under New Jersey law, assets not titled in your trust and not subject to a beneficiary designation must pass through probate. Without a will, those assets are distributed under the state’s intestacy statutes, which may not reflect your wishes.
Key Takeaway: A pour-over will is a necessary companion to your revocable living trust. It catches any assets not titled to the trust at the time of your death and helps direct those assets according to your trust’s terms rather than New Jersey’s default intestacy rules.
How Can a NJ Living Trust Attorney Help You?
A New Jersey living trust attorney handles every stage of the trust process, from drafting the trust document to funding it and keeping it current as your life changes. The attorney prepares the trust agreement, records new deeds to transfer real estate, coordinates with banks and brokerage firms to retitle accounts, and reviews beneficiary designations to make sure they align with your overall plan. An attorney can also update your trust after major life events such as marriage, divorce, the birth of a child, or the purchase of new property.
Legal Guidance for New Jersey Revocable Living Trust Planning
Creating a revocable living trust involves more than signing a document. You need to consider how the trust will be funded, which assets should be transferred, who should serve as successor trustee, and how the trust will work alongside your pour-over will, powers of attorney, and beneficiary designations.
Christine Matus and The Matus Law Group help New Jersey families create and maintain revocable living trusts tailored to their goals. We assist clients throughout Monmouth County and across New Jersey with trust-based estate planning designed to support long-term planning and smoother administration.
To discuss whether a revocable living trust fits your estate plan, contact The Matus Law Group at (732) 785-4453 to schedule a consultation. Our office is located at 125 Half Mile Rd #201A, Red Bank, NJ 07701, and we serve clients throughout Monmouth County and across New Jersey.
Frequently Asked Questions
What makes a revocable living trust revocable?
A revocable living trust is considered revocable because the person who creates it can generally change or cancel it during their lifetime, as long as they have legal capacity. Under New Jersey law, this may include revising the terms, changing beneficiaries, or revoking the trust entirely. This flexibility is one of the main distinctions between a revocable trust and an irrevocable one.
Does a revocable trust avoid estate taxes in New Jersey?
No. Property held in a revocable trust is generally still included in your taxable estate because you keep control of it during your lifetime. Although New Jersey no longer imposes an estate tax on decedents dying on or after January 1, 2018, New Jersey inheritance tax may still apply depending on the beneficiary. Federal estate tax may also apply if the estate exceeds the federal exclusion amount.
How long does it take to set up a living trust in New Jersey?
The timeline for creating a living trust depends on the clauses and inclusions your attorney needs to draft after they gather the necessary information. Funding the trust may take longer, depending on the number of assets involved and how quickly deeds, account transfers, and beneficiary updates can be completed.
Can I be the trustee of my own revocable living trust in NJ?
Yes. Most people serve as trustees of their own revocable living trust, which allows them to continue managing the trust assets during their lifetime. The successor trustee typically steps in only if the original trustee becomes incapacitated or dies.
What happens to my living trust if I move out of New Jersey?
Revocable living trusts are generally recognized in other states, so moving out of New Jersey will not usually invalidate your trust. Still, it is wise to have an attorney in your new state review the document, particularly if you own real estate there or may be affected by different tax or transfer rules.
Is a living trust a public record in New Jersey?
No. A revocable living trust is generally a private document and is not filed with the court the way a will becomes part of the probate record. For many New Jersey families, that added privacy is one reason to consider a trust-based plan.
Can a revocable trust protect assets from creditors in NJ?
No. Assets in a revocable living trust are generally not shielded from your creditors because you still control the trust and can change or revoke it. If asset protection is a primary concern, another planning structure, such as an irrevocable trust, may be more appropriate.
What is a pour-over will and do I need one with my NJ trust?
A pour-over will is a backup document that directs assets outside your trust at death into the trust for distribution under its terms. It is commonly used alongside a revocable living trust and is also the document used to nominate a guardian for minor children in New Jersey.
