Red Bank Estate Planning Attorney Christine Matus Explains the Advantages and Disadvantages of a Living Trust in New Jersey

RED BANK, NJ - August 21, 2026 - New Jersey residents weighing how to protect their assets and provide for loved ones often consider whether a living trust belongs in their estate plan. Red Bank estate planning attorney Christine Matus of The Matus Law Group (https://matuslaw.com/advantages-disadvantages-creating-living-trust/) has published guidance examining the benefits and trade-offs of living trusts, helping families understand how these tools work under New Jersey law. The discussion covers probate avoidance, privacy, incapacity planning, costs, funding, and how a trust compares to a traditional will.

A living trust is a legal document created during a person's lifetime that holds and manages assets for chosen beneficiaries. Red Bank estate planning attorney Christine Matus notes that under the New Jersey Uniform Trust Code (N.J.S.A. 3B:31-1 et seq.), a trust involves three roles: the grantor who creates it, the trustee who manages the assets, and the beneficiaries who receive them. "In most living trusts, the same person serves all three roles during life and names a successor trustee to step in after death or incapacity," Matus explains.

Red Bank estate planning attorney Christine Matus points out that the two primary types of living trusts, revocable and irrevocable, serve very different purposes. A revocable trust can be modified or revoked at any time and offers flexibility, but the grantor retains control, so the assets remain reachable by creditors and part of the taxable estate. An irrevocable trust generally cannot be changed once established, and that loss of control is what may allow it to provide creditor protection or estate tax planning in certain situations.

Among the main advantages, the article highlights probate avoidance. Assets properly transferred into a living trust generally bypass the county surrogate process, allowing a successor trustee to distribute them without court supervision. In New Jersey, uncontested probate is handled through the county Surrogate's Court, with the Monmouth County Surrogate's Office in Freehold processing filings for local residents, while contested matters may involve the Superior Court of New Jersey, Chancery Division, Probate Part.

Privacy is another benefit, since wills become part of the public record once probated, while living trusts typically remain private. Matus emphasizes the value of incapacity planning as well. "If someone becomes unable to manage their financial affairs, the successor trustee named in a funded trust can step in immediately, without the family needing to petition the court for guardianship," she says. A trust can also speed up asset distribution and help owners of out-of-state property avoid ancillary probate in multiple states.

The article is equally candid about the disadvantages. Matus advises that a revocable living trust does not shield assets from creditors, because the law treats those assets as the grantor's own. Creditors may pursue judgments through the New Jersey Superior Court, whether in Monmouth County at Freehold or Ocean County at Toms River. A revocable trust also does not reduce estate or inheritance taxes. New Jersey no longer imposes a state estate tax for individuals who died on or after January 1, 2018, though the federal estate tax may apply to very large estates, with the federal exemption set at $15 million per individual for 2026. New Jersey inheritance tax may still apply when assets pass to siblings, nieces, nephews, or unrelated beneficiaries.

Certain assets present limitations. Retirement accounts such as IRAs and 401(k)s cannot be retitled into a trust, though they can name the trust as a beneficiary, and health savings accounts must remain in an individual's name. Matus also notes that living trusts, while less frequently challenged than wills, can still be contested on grounds such as undue influence, lack of capacity, fraud, or improper execution, and strict notice deadlines apply after a settlor's death.

Attorney Matus stresses that a trust only works as intended when it is properly funded. "Leaving appropriate assets outside the trust is one of the most common mistakes, because those assets may still pass through probate even though the trust exists," she observes. Transferring New Jersey real estate requires drafting and recording a new deed with the county clerk where the property is located, such as the Monmouth County Clerk's Office in Freehold for communities including Red Bank, Middletown, Howell, and Long Branch. Because New Jersey does not permit transfer-on-death deeds for real estate, proper titling within a trust is one of the most effective ways to avoid probate for that property. A pour-over will can serve as a safety net for assets left outside the trust.

The setup cost of a living trust in New Jersey is usually higher upfront than a simple will, and the article addresses deed recording fees, retitling costs, and ongoing maintenance as circumstances change. Matus reminds readers that a trust is not necessary for everyone but can be especially valuable for those who own property in more than one state, have blended families, wish to plan for incapacity, or have a beneficiary with special needs.

For New Jersey residents deciding whether a living trust fits their goals, consulting an experienced estate planning attorney may help clarify the right approach based on individual assets and family circumstances.

About The Matus Law Group:

The Matus Law Group is a New Jersey estate planning firm based at 125 Half Mile Rd Ste 200, Red Bank, NJ 07701. Founded by attorney Christine Matus, the firm focuses on estate planning, special needs planning, elder law, and real estate, serving families throughout Red Bank, Monmouth County, Ocean County, and across New Jersey. For consultations, call (732) 785-4453.

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