New Jersey Irrevocable Trust Attorney
Working with a New Jersey irrevocable trust attorney can help you protect and manage your assets while providing a lasting plan for your family’s financial future.
For many New Jersey families, putting assets in an irrevocable trust is one of the most effective ways to protect what you have built from creditors, nursing home costs, estate taxes, and Medicaid spend-down requirements. Long-term care in New Jersey is expensive, making asset protection planning a priority for many families.
At Matus Law Group, our New Jersey irrevocable trust attorneys guide clients through the full process of creating, funding, and administering irrevocable trusts. Our estate planning lawyers help families weigh the advantages and disadvantages of creating an irrevocable trust before making this significant commitment. Choosing between a revocable and irrevocable trust depends on your specific goals, asset profile, and long-term care concerns, and we are equipped to walk you through every consideration before you commit to either path.
Call Matus Law Group at (732) 281-0060 to discuss whether an irrevocable trust is right for your family. We offer consultations for families throughout Ocean County and New Jersey who want to understand their options before making this decision.
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With over 20 years of experience, we help New Jersey families establish irrevocable trusts as part of their estate and asset protection planning. Our attorneys can help you determine how an irrevocable trust fits your goals, prepare the appropriate trust documents, and address considerations involving Medicaid planning, beneficiaries, and long-term asset management. Contact Matus Law Group to schedule a consultation today.
What Is an Irrevocable Trust in New Jersey?
An irrevocable trust is a legal arrangement in which the person creating the trust (called the settlor) transfers ownership of assets to a trustee, who then manages those assets for named beneficiaries. Once the transfer is complete, the settlor generally cannot take the assets back, change the trust terms, or cancel the trust. The New Jersey Uniform Trust Code (N.J.S.A. 3B:31-1 et seq.) governs the creation, administration, and modification of trusts in New Jersey.
Because the settlor no longer owns the assets, those assets are generally protected from the settlor’s creditors, lawsuits, and certain tax obligations. This separation of ownership is the foundation of the asset protection and tax benefits an irrevocable trust can provide.
How Does an Irrevocable Trust Differ from a Revocable Trust?
A revocable trust allows the settlor to change, amend, or revoke the trust at any time. An irrevocable trust generally cannot be changed or canceled once it is created. Here, we compare the notable features of revocable and irrevocable trusts and their fundamental characteristics:
| Feature | Revocable Trust | Irrevocable Trust |
|---|---|---|
| Can the settlor change or cancel it? | Yes, at any time | Generally no |
| Does it protect assets from creditors? | No | Yes, if properly structured |
| Does it avoid probate? | Yes | Yes |
| Does it reduce estate taxes? | No | Sometimes, if properly structured |
| Does it protect Medicaid eligibility? | No | Yes, after a five-year look-back |
| Who pays income tax on trust earnings? | Settlor | Trust or beneficiaries (varies) |
Who Are the Key Parties in an Irrevocable Trust?
Every irrevocable trust involves three key roles: the settlor, the trustee, and the beneficiary. Understanding each role is essential before creating a trust.
- Settlor (or grantor): The person who creates the trust and transfers assets into it
- Trustee: The person or institution responsible for managing the trust assets according to the trust terms
- Beneficiary: The person or persons who receive the benefits of the trust assets
If asset protection or tax planning is the goal, the settlor generally should not be the sole trustee and sole current beneficiary, because that structure can undermine the separation needed for those benefits.
Key Takeaway: Unlike a revocable trust, an irrevocable trust is generally much harder to change. In New Jersey, some changes may be made with the consent of the trustee and all beneficiaries under N.J.S.A. 3B:31-27, while other changes may require court involvement under N.J.S.A. 3B:31-28 or N.J.S.A. 3B:31-31.
If you’re considering an irrevocable trust in New Jersey, The Matus Law Group can help you understand your options and determine whether this strategy fits your long-term goals. Call (732) 281-0060 to schedule a consultation and get guidance tailored to your situation.
What Are the Advantages of an Irrevocable Trust?
Irrevocable trusts offer New Jersey families strong legal protections across three primary areas: creditor protection, probate avoidance, and enhanced privacy. Each of these benefits can play a significant role in preserving wealth for the next generation.
Asset Protection from Creditors
Once assets are transferred to a properly designed irrevocable trust, they may be harder for the settlor’s future creditors to reach, depending on the trust terms, timing, and applicable transfer rules. A spendthrift provision under N.J.S.A. 3B:31-36 can also prevent beneficiaries’ creditors from seizing trust distributions before they are received.
Avoiding Probate in New Jersey
Assets held in an irrevocable trust pass directly to beneficiaries without going through probate. By keeping assets out of probate, families in Ocean County save time, reduce legal costs, and avoid delays from court proceedings.
Privacy and Control Over Distribution
Unlike a will, which becomes a public record when filed with the Ocean County Surrogate’s Court, a trust remains private. The settlor can also set specific terms for how and when beneficiaries receive assets, such as in stages, at certain ages, or only for education or healthcare.
Key Takeaway: Irrevocable trusts offer New Jersey families three major advantages: creditor protection, probate avoidance, and enhanced privacy. Understanding how these benefits apply to your overall estate plan requires careful review of your assets and long-term goals. Contact the Matus Law Group today at (732) 281-0060 to schedule a consultation.
How Does an Irrevocable Trust Protect Assets in New Jersey?
Once you transfer assets into an irrevocable trust, you no longer own them. Because the assets belong to the trust, they are generally beyond the reach of your personal creditors, legal judgments, and long-term care costs. However, the timing of the transfer matters significantly.
Protection from Nursing Home and Long-Term Care Costs
Long-term care can be extremely expensive, and Medicaid treatment of irrevocable trusts must be reviewed carefully under New Jersey regulations. If payments can be made to or for the benefit of the applicant, that portion may be treated as an available resource. If payments cannot be made to or for the applicant’s benefit, the transfer may still trigger a Medicaid transfer penalty if it occurred within the 60-month look-back period.
Protection from Lawsuits and Judgments
Assets held in an irrevocable trust are generally protected from future lawsuits and court judgments against the settlor. A valid spendthrift provision can help protect a beneficiary’s interest from creditor claims before distribution.
Key Takeaway: A well-drafted irrevocable trust may help protect assets from some future creditor claims. Medicaid treatment is a separate issue: transfers can trigger a penalty if they fall within New Jersey’s 60-month look-back period.
Questions about how timing and structure affect asset protection are common when considering an irrevocable trust. To speak with NJ irrevocable trust attorney Christine Matus, contact us at (732) 281-0060 to schedule a consultation on how New Jersey rules may apply to your situation.
Can an Irrevocable Trust Help You Keep Government Benefits?
A properly structured irrevocable trust may help with Medicaid planning in some situations. For SSI and disability planning, a special needs trust is often the more relevant tool.
What Assets Are “Non-Countable” Under NJ Medicaid Rules?
When you apply for Medicaid in New Jersey, assets in your name count against you. Assets properly transferred to an irrevocable trust, where the trustee cannot return them to you, are generally not counted as available resources. The trust must be structured so that neither income nor principal can be paid to or for the benefit of the settlor, and the five-year look-back period, during which Medicaid reviews transfers made in the 60 months before you apply for benefits, must have passed.
How a Special Needs Trust Preserves SSI and Medicaid
A special needs trust is an irrevocable trust designed for individuals with disabilities. It can allow a disabled beneficiary to receive an inheritance or settlement without automatically losing SSI or Medicaid eligibility, while still paying for supplemental needs that government benefits do not cover.
Key Takeaway: A properly drafted irrevocable trust can protect New Jersey residents’ eligibility for Medicaid and SSI by removing assets from the “countable” category. Timing and structure are critical under NJ Medicaid’s five-year look-back rule.
Medicaid and SSI eligibility rules can be complex, especially when trusts are involved. Contact Matus Law Group at (732) 281-0060 to learn how these rules apply based on your specific circumstances.
How Do Irrevocable Trusts Reduce Estate Taxes in New Jersey?
Certain transfers to an irrevocable trust may be removed from the settlor’s taxable estate and may reduce federal estate-tax exposure. This strategy may be particularly valuable for families focused on federal estate tax exposure or other transfer tax planning goals.
Does New Jersey Still Have an Estate Tax?
New Jersey eliminated its estate tax for decedents dying on or after January 1, 2018, but the state still imposes an inheritance tax on certain beneficiaries.
- Class A beneficiaries (spouses, parents, children, and grandchildren) are exempt.
- Class C beneficiaries (siblings and a child’s spouse or surviving spouse) receive a $25,000 exemption and then pay graduated rates from 11% to 16%.
- Class D beneficiaries (everyone else) generally pay a 15% to 16% tax on the entire inheritance if it is valued at $500 or more.
How an Irrevocable Trust Reduces Federal Estate Tax Exposure
For 2026, the federal basic exclusion amount is $15,000,000. Irrevocable trusts such as Irrevocable Life Insurance Trusts (ILITs) and Spousal Lifetime Access Trusts (SLATs) can remove assets from the gross taxable estate and can help high-net-worth New Jersey families stay below the exemption threshold.
Key Takeaway: New Jersey eliminated its estate tax in 2018, but families with large estates still face federal estate taxes and the NJ inheritance tax. Irr
What Are the Disadvantages of an Irrevocable Trust?
The most significant disadvantage of an irrevocable trust is the permanent loss of control over the assets you transfer. Before proceeding, every settlor should carefully weigh this trade-off against the legal and financial protections the trust provides.
Loss of Control Over Trust Assets
Once you transfer assets into an irrevocable trust, you give up the right to use, sell, or reclaim that property. The trustee manages the assets according to the trust terms, and you cannot direct how they are invested or distributed.
Difficulty Modifying or Terminating the Trust
Under N.J.S.A. 3B:31-27, modifying or terminating a noncharitable irrevocable trust generally requires the consent of the trustee and all beneficiaries. Courts may modify a trust under N.J.S.A. 3B:31-28 when unanticipated circumstances arise, but this is the exception, not the rule.
Key Takeaway: The primary disadvantage of an irrevocable trust is the loss of control. Once assets are transferred, they generally cannot be reclaimed without the consent of all beneficiaries and the trustee.
Deciding whether to give up control of assets requires careful consideration of your long-term financial and family goals. Contact us today at (732) 281-0060 to discuss how these trade-offs may apply in your situation.
New Jersey Irrevocable Trust Attorney - Matus Law Group
Christine Matus, Esq.
Christine Matus is a New Jersey irrevocable trust attorney and founder of The Matus Law Group, with decades of experience helping individuals and families plan for the future. Admitted to practice in both the State of New Jersey and the U.S. District Court of New Jersey since 1995, she focuses her practice on estate planning strategies, including the creation and management of irrevocable trusts to help protect assets and provide long-term security. She earned her J.D. from Touro College Jacob D. Fuchsberg Law Center and holds a B.A. in Economics from Douglass College at Rutgers University.
She is an active member of the legal community, including the New Jersey State Bar Association, Ocean County Bar Association, where she served as president and secretary, the American Bar Association, and the Asian Pacific American Lawyers Association. She also serves on the Attorney Arbitration Committee and regularly lectures on estate planning and elder law topics. In addition, she is involved in several board and advisory roles throughout Ocean County, reflecting her ongoing commitment to both her profession and her community.
What Are the Tax Implications of an Irrevocable Trust?
Irrevocable trusts carry important tax consequences that depend on how the trust is structured. Whether the trust is classified as a grantor trust or a non-grantor trust determines who pays income tax on earnings and at what rate.
Who Pays Income Tax on Irrevocable Trust Earnings?
In a grantor trust, the settlor pays income tax on the trust’s earnings. In a non-grantor trust, the trust itself pays income tax at compressed rates. For 2026, a non-grantor trust reaches the top federal income tax rate of 37% on taxable income over $16,000. This compressed schedule means non-grantor trusts can face steep tax bills on even modest income.
What Happens to the Step-Up in Basis?
Assets that pass through a person’s estate at death typically receive a step-up in basis, which reduces capital gains taxes for heirs. Assets transferred to an irrevocable trust during the settlor’s lifetime may not receive this step-up, potentially costing beneficiaries thousands in capital gains taxes when they eventually sell.
Gift Tax Consequences of Funding an Irrevocable Trust
Transferring assets to an irrevocable trust is generally treated as a taxable gift under federal law. For 2026, the annual gift-tax exclusion is $19,000 per recipient, and the federal basic exclusion amount is $15,000,000.
Key Takeaway: Irrevocable trusts carry important income tax and gift tax implications that vary based on how the trust is structured. Assets transferred to the trust may also lose the step-up in basis, a trade-off that requires careful analysis with a New Jersey estate planning attorney.
Can an Irrevocable Trust Be Changed in New Jersey?
There are limited circumstances under New Jersey law where an irrevocable trust can be modified or terminated. Understanding these options before creating a trust helps settlors plan for unexpected future changes.
When Can a NJ Court Modify an Irrevocable Trust?
Under N.J.S.A. 3B:31-27, a noncharitable irrevocable trust may be modified or terminated with the consent of the trustee and all beneficiaries, as long as the modification is not inconsistent with a material purpose of the trust. N.J.S.A. 3B:31-28 allows a court to modify a trust when unanticipated circumstances make modification consistent with the settlor’s probable intent.
Courts may also reform a trust under N.J.S.A. 3B:31-31 to correct mistakes, even if the trust language is unambiguous. Some of these remedies require court involvement, while others may be available by consent under New Jersey law.
What Mistakes Should You Avoid with an Irrevocable Trust?
Even small errors in creating or managing an irrevocable trust can affect how well it works. Understanding common mistakes can help ensure the trust achieves its intended purpose.
Failing to Fund the Trust Properly
Creating a trust document is only the first step. The trust must actually hold assets to provide any protection. This means legally retitling property into the trust’s name, including:
- Real estate (transferred by recorded deed)
- Bank and investment accounts
- Life insurance policies
- Business interests
An unfunded trust provides no asset protection, no tax benefits, and no Medicaid planning advantages. Every trust that Matus Law Group drafts includes a funding plan to ensure clients complete this critical step.
Waiting Too Long to Act
The Medicaid five-year look-back period means every month of delay is a month of lost protection. Many New Jersey families make this mistake by waiting until a health crisis has already begun.
Using Online Templates Without Legal Guidance
Generic trust templates rarely comply with New Jersey’s requirements under the Uniform Trust Code. They may omit required provisions, create unintended tax consequences, or fail to include proper spendthrift language. The cost of fixing a poorly drafted trust almost always exceeds the cost of having it drafted correctly from the start.
Key Takeaway: The most common irrevocable trust mistakes in New Jersey, including failing to fund the trust, waiting too long, and using generic templates, can all be avoided by working with a qualified trust attorney from the beginning.
Avoiding these issues often depends on how the trust is drafted and implemented from the start. Contact us at (732) 281-0060 to discuss how these considerations apply to your situation.
Service Areas
Matus Law Group serves clients throughout New Jersey from its office in Toms River. Our team regularly works with families in Ocean County communities, including Lakewood, Brick, Jackson, Manchester, Barnegat, Point Pleasant, and Stafford. Matus Law Group also represents clients across Monmouth County, Burlington County, Middlesex County, and other areas of New Jersey.
Experienced Legal Guidance from a New Jersey Irrevocable Trust Attorney
An irrevocable trust is a binding legal document, and getting one wrong can cost your family far more than the planning itself. New Jersey law requires careful attention to funding, tax structure, and Medicaid compliance.
Matus Law Group walks each client through the entire process, evaluating whether an irrevocable trust is the right tool, selecting the appropriate type of trust, drafting it to meet New Jersey legal requirements, and making sure it is properly funded. We also help clients understand the full advantages and disadvantages of an irrevocable trust before committing.
Call Matus Law Group at (732) 281-0060 or visit our office at 81 E Water St #2C, Toms River, NJ 08753 to schedule a consultation.
Frequently Asked Questions About Irrevocable Trusts in New Jersey
What is the difference between a revocable and an irrevocable trust?
A revocable trust can be changed, amended, or canceled by the settlor at any time. An irrevocable trust generally cannot be changed once it is created. Because the settlor gives up ownership of the assets, an irrevocable trust provides asset protection and tax benefits that a revocable trust does not.
Can I be the trustee of my own irrevocable trust?
You can serve as a trustee in limited circumstances, but you cannot be the sole trustee and sole beneficiary of the same irrevocable trust under New Jersey law. Serving as trustee may also undermine the asset protection and tax benefits the trust is designed to provide, so most attorneys recommend appointing an independent trustee.
How long does it take to set up an irrevocable trust in New Jersey?
Drafting the trust document typically takes two to four weeks, depending on complexity. Funding the trust can take additional time, especially if real estate must be retitled by deed.
What is the five-year look-back period for Medicaid?
When you apply for Medicaid in New Jersey, the state reviews all asset transfers made within the previous 60 months. Transfers to an irrevocable trust made within this window may result in a penalty period during which you cannot receive Medicaid benefits for long-term care.
Can an irrevocable trust protect my home from nursing home costs?
Yes, if you transfer your home to an irrevocable trust at least five years before applying for Medicaid, the home is generally not counted as an available asset. Transfers made within the five-year look-back period can trigger penalties, so early planning is critical.
Does an irrevocable trust avoid probate?
Yes. Assets held in an irrevocable trust pass directly to beneficiaries according to the trust terms, without going through the Ocean County Surrogate’s Court or any other probate court in New Jersey.
How much does an irrevocable trust cost in New Jersey?
The cost varies depending on the complexity of your estate and the type of trust. Most families should expect to pay several thousand dollars for a properly drafted irrevocable trust. Contact Matus Law Group for a consultation to discuss your specific needs and receive a clear estimate.
