Q: What's the diffeence between New York and New Jersey Trust laws?
A: The laws concerning trusts are very similar in New Jersey and New York—the primary reason is that both states derive their laws from the common law of England. In all cases, a trust should be in writing and one has to be careful to also use written deeds or documents to transfer the assets—real property, personal property, stocks, bonds, bank accounts, life insurance, etc. into the trust as the “beneficial owner” of the assets on behalf of the names beneficiaries of the trust. The individual(s) who set up or establish the trust are called the “grantor”, “settlor”, “maker” or “trustor” . The person who holds, takes care of, invests, preserves and protects the property in the trust is called the trustee. The trustee also distributes the income or principal of the trust to the beneficiaries in accordance with the trust’s directions. The property which is placed in the trust is called the trust “corpus”, “asset” or “res”. In both states, there are many types of trust which are fundamentally similar in nature: revocable, irrevocable, simple, complex, living, testamentary, etc. There are also custom drafted trusts in both New Jersey and New York, quite similar in substance, intended for specific purposes—life insurance trusts, nursing home planning and Medicaid qualifying trusts, income tax and estate tax planning trusts and special needs trusts to protect the assets of loved ones with disabilities. The individual who establishes a living trust in some instances can act as his own trustee especially if it is a revocable living (sometimes called “inter vivos”) trust. In other instances, it is best and often legally necessary for tax or other reasons to have another person such as a trusted relative act as the trustee. In all instances, there should be a back-up or successor trustee in case the primary or first designated trustee becomes unable to act or passes away. In the end, all of these trusts as discussed are used regularly in both New Jersey and New York. When dealing with any type of trust, one must consult and work with a New Jersey or New York attorney knowledgeable in such matters.
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