What are self-settled trusts?

Self-settled trusts are trusts that are created and funded by a single individual. These types of trusts are commonly used in asset protection law for individuals living in New Jersey. The person establishing the trust, known as the settlor or grantor, transfers some of their assets to the trust, such as cash, stocks, bonds, and other investments. The settlor is also the beneficiary of the trust and can withdraw the trust’s assets as needed. The primary purpose of self-settled trusts in New Jersey asset protection law is to protect the settlor’s assets from creditors. This means that any assets placed in the trust are no longer owned by the settlor and therefore cannot be seized by creditors in the event of bankruptcy or other legal proceedings. This allows the settlor to keep their assets safe while still being able to access them. Self-settled trusts in New Jersey are governed by the Uniform Trust Code and may be subject to state laws on the protection of assets. To ensure they are properly established and managed, individuals should consult with an estate-planning attorney to ensure their trusts are properly documented and understood. With the proper estate planning, self-settled trusts can provide an effective asset protection strategy.

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What are self-settled trusts?

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