Disclosure: This podcast episode is for informational purposes only and is not intended as legal advice. Laws are complex and can vary by state, individual situation, and more, so it’s essential to consult with an Estate Planning Attorney for advice tailored to your specific needs.
Most people have heard of trusts — but few truly understand whether they need one, how they work, or what they actually solve.
In this episode of The Agent of Wealth Podcast, John Williams is joined by Tom Szieber, a North New Jersey estate planning attorney who helps families build thoughtful, tax-efficient, and practical estate plans. Together, they break down the real purpose of trusts, when they make sense, and how to know which type may be right for you.
In this episode, you will learn:
- Why so many families are now exploring trusts – and why probate avoidance has become a major driver.
- The three core roles in every trust and how they work together.
- The key differences between revocable and irrevocable trusts (and what most people misunderstand about each).
- How titling, beneficiary designations, and pour-over wills determine what actually happens to your assets.
- And more!
Tune in for a clear, practical conversation that demystifies trusts and helps you understand how they fit into a modern estate plan.
Resources:
Law Offices of Peter G. Aziz & Associates | Tom Szieber, Jr., Esq. | LinkedIn | Instagram | Bautis Financial: 8 Hillside Ave, Suite LL1 Montclair, New Jersey 07042 (862) 205-5000 | Schedule an Introductory Call
Disclosure: The transcript below has been edited for clarity and content. It is not a direct transcription of the full episode, which can be listened to above.
Welcome back to The Agent of Wealth Podcast, this is your co-host John Williams. Today, we’re diving into one of the most common questions I hear from clients: Do I need a trust?
Trusts are often talked about in the world of estate planning, but many people aren’t sure what they really are, how they work, or whether they make sense for their situation. Today, I’m joined by Tom Szieber, a North New Jersey estate planning attorney.
Tom has over a decade of experience helping families create tax-efficient, thoughtful, and meaningful estate plans.
In this episode, we’re going to break down the different types of trusts, talk about how they’re structured, and give you a clear picture of what it’s like to work with an estate planning attorney like Tom when setting up your plan.
Whether you’re looking to protect your family, minimize taxes, or just gain peace of mind, this is the conversation for you…
Tom, welcome to the show.
Thanks, John. Good to be with you.
Excellent. Yeah, I’m really looking forward to this conversation because when I said that, I truly meant it — it’s one of the most common questions we get, and there are a lot of nuances. So I’m really interested to dive into our conversation today. But before we get started, I’d love for the listeners to hear a little bit more about you — what drew you to law, and maybe estate planning in general.
Yeah, sure. I’m a North Jersey native. Specifically, I grew up in Clifton. I went to Rutgers Law School, and I got my LLM in Taxation from Boston University. As an undergrad, interestingly, I was a Montclair State graduate who majored in communication, so I moonlight as a part-time high school sports writer, which is always an interesting talking point when I speak to people about my professional life.
What drew me to law, I think, was that as I made my way through my academic journey, I started to become more interested in the skills you get in this industry as you’re going through law school and so on and so forth. Initially, I probably thought I was going to use those skills to move into the business world. I thought I’d end up in some sort of corporate law background, but some of my early professional roles drew me to trusts and estates, and it’s become a real passion of mine.
Excellent. Today we’re going to talk a little bit about trusts. Obviously, there are a lot of different directions we could go with that conversation, but to start, I think it might be easiest for us to break things down at a high level — without getting into specific types of trusts. What really is a trust?
I think one way to look at it, and this is how I learned it, is that there are three buckets — and each bucket represents its own role when you do trust planning. One is the settlor, or the grantor, and that’s the person who establishes the trust. Second, you have a trustee, who is responsible for managing the assets and furthering the purpose of the trust — and obviously, that purpose can vary depending on the situation. Third, you have one or more beneficiaries, and they receive the benefit of the trust, whether it’s income or principal or use of the trust property.
Conversationally, the way I would describe it is that it breaks down the roles. It’s not simply one individual who owns it, benefits from it, and creates the trust. It’s a division of roles.
Yeah, so thinking about those three different parties, most trusts will have all three of those aspects.
And in fact, they have to. Sure.
Yeah. So what are some of the most talked-about topics when someone comes to you and says, “I think I need a trust”? Why do you think this topic typically comes up, and where do you think that’s coming from?
Pre-pandemic, I think more moderate-wealth individuals — and even some high-net-worth individuals — typically just used a standalone will. I don’t know if it was the inefficiency of the courts during the pandemic, but I noticed a lot of backlog in the courts. There were horror stories about how long it took to get a will probated and how assets were held up because individuals couldn’t get executor certificates issued in an efficient period of time.
And it hasn’t really gone back, in my experience. Courts can be slow and inefficient even in good times, but during unique situations like that, they can be especially inefficient. I’ve noticed more people coming to me specifically wanting trusts for the purpose of probate avoidance.
I also think people sometimes want to explore tax-saving and creditor-protection mechanisms — tools they can use to provide for their kids and grandkids. In the estate-planning universe, we often say that trusts are very flexible, and we say that for a reason. There are a lot of goals you can accomplish by including a trust in your estate plan.
Is there one main reason you feel is most common — where people come to you and say, “I think I need a trust”?
Recently, it’s been people wanting to simply avoid the courts and leave them out of the picture to the maximum extent possible. If I had to pick one right now, probate avoidance seems to be the reason a lot of people want trusts.
But again, people want to explore tax savings too. As a practical matter, people with more moderate wealth may not be aware that with the estate tax exemption so high — around $14 million this year and scheduled to go up — there may not actually be much tax planning they need. But they still come in with those questions.
People also like to explore trusts for creditor protection, protection against divorce, and even protection from irresponsible spending habits of a beneficiary. Folks ask those questions a lot, and that’s often the motivation for wanting a trust.
I feel like I get the same thing about probate. And maybe while we’re on that topic — for those who don’t understand, and without going too far down the probate wormhole — maybe it’s important to give some detail about what probate actually means, and what the difference would be if someone had a trust versus not having a trust.
When you have simply a will in place — or if you have nothing in place — your executor will have to probate the will, meaning submit it to, in New Jersey, your local Surrogate’s Court. The Surrogate’s Court will “bless” the document, so to speak, making sure it meets the formalities required by state law. From there, they’ll issue letters testamentary — executor certificates — to the appointed executor, who then has the authority to act and carry out the directions in the will.
If you have no will, the process is generally similar, but the individual applies for letters of administration, and there are extra steps involved that make it more burdensome than simple probate. In either case, you’re waiting for some period of time to get your certificates issued, and depending on how urgently your executor needs access to assets, that can be burdensome too.
Someone who includes at least a revocable trust in their estate plan can almost instantly access certain assets if they’re included in the trust. There are other benefits too. Something that comes up a lot is that if a person is leaving assets to very young people, they’ll want those assets in trust — and while you can create trusts in a will, those are subject to greater scrutiny by the Surrogate’s Court.
Whereas when lifetime trusts are established in a revocable trust instrument, I find that more useful because there’s probably a greater likelihood that trustee changes will be needed in the future, and that process can be handled more easily when it’s done privately — meaning under a revocable trust — rather than in a will.
Could you extrapolate on what I believe is called a “testamentary trust,” or a trust that is actually created by a will, and what that means?
Yes. You can have a will in place that simply states that assets passing via the will should go into trust for a spouse, kids, or really anyone. But those types of trusts require Surrogate’s approval for changes in trusteeship and other administrative tasks.
When you create those trusts in a revocable trust, they’re administered privately. So if you need to change trustees, it’s essentially a one-page document — and you don’t have to go through the Surrogate’s Court.
It seems to me — and I think there’s a misconception — that people don’t always realize a will can actually create a trust. Many think, “Oh, I need a revocable trust,” but in simpler situations, sometimes the trust created within the will is sufficient. I imagine one of the hardest parts of working with clients is deciding when to rely on the will and when to move to a revocable trust. Are there certain situations that come to mind where you’d steer someone one way or the other?
Yes, there are. Sometimes people come in thinking they want a revocable trust, and one misconception is that the mere creation of the trust will allow probate avoidance. Sometimes they don’t realize you still have to retitle assets into the name of the trust. There’s more work on the front end.
Some people come in and realize their estate administration would be more efficient with the trust in place, and as long as they don’t mind signing a deed to transfer their house into the trust or retitling bank accounts, they’ll often prefer the trust if probate avoidance is the goal. Others don’t want to do that upfront work, so they stick with a will.
Sometimes we create plans where the will is still the primary vehicle for transferring assets, but the couple might add beneficiary designations or ensure assets are jointly held — which can also achieve probate avoidance. It’s very case-by-case.
Some people come in not wanting a trust and then change their mind. Others come in wanting a trust and then realize their estate is simple enough that the benefits aren’t meaningful for them, and they stick with a standalone will.
You just touched on something really important. There are different ways assets can pass — and when it comes to financial assets, beneficiaries often simplify things, especially when heirs are responsible adults and the goal is simply transferring money efficiently. Are there certain considerations for assets that don’t typically have beneficiary designations?
Yes. Some clients can achieve everything they want simply through beneficiary designations. Particularly on the first spouse’s death, if everything is jointly held, it might be simpler to let assets pass through joint ownership, especially if someone doesn’t want to spend extra money setting up a trust.
But I do caution clients: in a simultaneous-death event, or if spouse one dies and spouse two never sets up a trust, then more assets will end up going through probate. So while beneficiary designations can achieve many of the same benefits — particularly on the first death — there are still many good reasons to have a trust in place from the get-go, especially for the second death.
There are some assets that probably jump out where a trust may be more relevant. One that comes up a lot for us is a primary home. It’s usually the biggest asset outside of collections or personal property. Let’s talk about the home and what probate looks like versus what it looks like when the home is titled in a trust.
Often I’m dealing with married couples, and married couples commonly own property in a form called tenancy by the entirety. That means that on the death of the first spouse, the property automatically passes to the surviving spouse. There’s also creditor protection built into that form of ownership, because the law views the property as being owned by the marital unit — not by the spouses individually.
From a probate-avoidance perspective, again, on the first death there may be little difference because the home already passes automatically. But when you have tenants-in-common — who each have distinct interests — or a single owner, the estate may need to sell the house more quickly, especially if it’s the primary or only asset.
If the estate has debts or tax obligations, it may need quick access to the home’s value. It can take a couple of months before the estate has authority to sell the house. That delay is one of the biggest reasons people want their home titled in a trust.
So for the purchase of a home, is there anything people should be aware of to establish that tenancy by the entirety? Or is that mostly standard?
It’s pretty standard. Most clients I work with don’t even realize their home is titled that way, but when a deed lists “husband and wife” or notes that the buyers are married, that signifies tenancy by the entirety.
When I’ve handled real estate transactions — and I think this is true industry-wide — attorneys and title companies generally presume married couples will own the property this way unless instructed otherwise. So the overwhelming majority of married couples own their homes as tenants by the entirety, even if they don’t realize it.
Excellent. So let’s talk about the second death of a married couple and what that could look like. I’d love to hear specifics on what happens if a house has to go through probate versus what happens when it’s held in a trust, just so listeners understand the difference in ease and efficiency.
If a house is held in a trust, in theory someone can pass away on Monday, and that same week the successor trustee can step in. They’d have immediate authority to begin disposing of assets. If no beneficiary wants the home and would prefer proceeds instead, the trustee can begin the sale quickly — hiring a realtor, signing a contract, whatever is needed — because they already have authority.
Whereas if the home is owned in the deceased individual’s name, you need to apply to the Surrogate’s Court to probate the will. There’s a lag before qualification papers are issued. Once those are signed and returned, there’s more lag before certificates are issued. And the estate may need proceeds sooner.
So it’s often more efficient, more convenient, and less stressful for the family if the home is already titled in a trust.
Are there costs involved? I mean, obviously it’s going to cost money to set up the trust — you’re not going to work for free. I know you’re a nice guy, but is there cost involved with probate in that process?
When I talk to clients about probate costs in a common scenario, I don’t like to be too dramatic about that. Most Surrogate’s Offices that I’ve dealt with have total costs that are usually maybe a few hundred dollars. There’s going to be a fee to apply, and there’s going to be a fee depending on how many certificates you’re asking to be issued. Most Surrogate’s Courts charge about $5 a certificate, so obviously that’s pretty modest and affordable.
But if you’re including attorney’s fees and things like that, costs can vary. I don’t know that if a client comes to me and says the only thing they care about is court fees that I would often steer them to a trust. If that was their sole concern, I try to be as honest as possible and say the costs are not exorbitant to deal with the Surrogate’s Court — but there are certainly some costs, sure.
Yeah, I think that is a common misconception. Let’s be honest: this is one of those things you hope you don’t have to deal with as a person, as an executor, or when someone you love passes away. A lot of times you don’t realize what’s involved until you’re there, thinking, “Okay, now I have to deal with this.” Obviously people want to save money, but purely setting up a trust just to avoid those costs doesn’t sound like it’s going to make sense in most cases.
The answer might be a little different though regarding whether someone should have a will or simply have nothing. People who die intestate — meaning without a will — can end up with significantly more costly administration for a couple of reasons.
One scenario I often deal with is when a relative passes away — for example, there’s one remaining spouse who dies, they have five children, and no will. Now, for one child to serve as the administrator of the estate, they’re going to need four renunciations from their siblings, because they all have an equal right to serve. Unless they’re drafting those documents themselves or using the court-issued form, they’re probably going to hire an attorney. They might hire an attorney anyway, but now they’re paying for attorney time to draft those renunciations.
They’re also likely going to have to contact an insurance company to place a bond. There might be slightly higher fees from the Surrogate, not substantially, but still more. And the process from start to finish is a little lengthier for administration than it is for probate.
So I mention that because, at minimum, people should have a simple will.
Yeah, that’s probably where the misconception comes in — obviously, the costs of not having a will. There are really three things: there’s no will, there’s a will, and then there’s a trust with a will. I think it’s great that we cleared that up. I’d like to dive in a little into the difference between revocable versus irrevocable. We’ve spoken mostly about revocable, and in most cases — especially since, as you said, the level of estate taxes and the exemption is so high — most people land with a revocable trust. But maybe we talk really quickly in basic terms about what a revocable trust is and how it contrasts with an irrevocable trust.
Sure. Revocable trusts are created during the lifetime of the settlor — again, that’s the person establishing it — and they are, as the name suggests, revocable. The settlor can change their mind and get rid of it if they choose, as many times as they want. They can establish, terminate, and reestablish a new trust repeatedly, and that is not a taxable event.
In a practical sense, sometimes you don’t even know it exists because the day-to-day is not much different than outright ownership. The settlor retains control over the assets and is often the trustee themselves. It’s considered part of that settlor’s taxable estate, so it doesn’t really provide any tax benefit or asset protection.
Sometimes clients come in with the misconception that a revocable trust will provide tax benefits or asset protection, and once they find out that it does not, they’ll ask, “Well, what does it do?”
It provides probate avoidance for the assets that are held in the trust. But again, you don’t get probate avoidance simply by creating the trust — there’s more work on the front end. It also provides privacy.
I can give you an interesting “war story,” so to speak. I once had an estate administration matter where the executor of the estate worked for a large company. They weren’t famous personally, but the company was well-known. They probated the will of their deceased family member and the very next day called me concerned because they were getting phone calls from strangers. I don’t know what those people wanted, but once a will is probated, it becomes publicly viewable through the court docket.
There wasn’t a lot I could do about it, but the point is privacy sometimes does matter. People disinheriting a relative or who have controversial aspects of their plan often prefer privacy.
Revocable trusts also provide for incapacity planning. When the settlor is still alive but can’t manage the assets themselves, if they are also the trustee, their successor trustee can step in and continue administering the assets.
An irrevocable trust, as the name suggests, is not revocable. Once you create it — “permanent” in quotes — it can only be modified in limited circumstances under New Jersey statute, but generally you can’t just say, “I don’t want this anymore,” and get rid of it. You are truly giving up control of that asset. Sometimes that means there are tax consequences when you gift property into an irrevocable trust.
But the term “irrevocable trust” is broad and includes a bunch of different specific kinds of trusts. For example, irrevocable life insurance trusts — we call them ILITs — are commonly used. When someone wants liquidity to pay estate tax, life insurance proceeds can be used, and if the life insurance is held in an ILIT, it’s outside the taxable estate.
Another type is a SLAT — a Spousal Lifetime Access Trust. Those can benefit a spouse, but again, they are irrevocable and can’t simply be terminated by a grantor who changed their mind.
You’re giving me some chills here. I remember going through the CFP exam — this area — estate planning — can be so complex. We’re just touching the surface here. There are so many different areas, especially in those really high-net-worth cases where you’re trying to avoid taxation. And with irrevocable trusts — it doesn’t mean wealthy individuals shouldn’t consider revocable trusts and whatnot.
But I’m glad you gave that distinction, because when I’m speaking with clients, I think they sometimes believe the revocable trust does more than it really does. Not that it isn’t important, but it’s important to understand: you’re not going to lose control of those assets.
One thing I hear — and I’d be curious about your thoughts — is about titling. You can title assets as though they’re owned by the revocable trust. What does that really mean, and what happens when the person — the grantor — passes away? What is the legal switch or change that occurs in that trust?
The change while they’re alive is generally nothing. If an individual transfers a piece of property to their revocable trust, and they have to sign some sort of document related to that property, it’s more proper to sign as John Smith, Trustee. Depending on the transaction, I’m not sure anyone would say much if they simply signed their name normally.
But on a day-to-day practical level, moving assets into a revocable trust isn’t that different from owning them outright.
Upon death, though, revocable trusts automatically become irrevocable. They’ll need a separate tax ID number and will file separate returns. If you pass assets to a descendant and those assets are held in trust, the assets — if structured properly — will provide asset protection and some tax benefits to your descendants.
To self-settle a trust and look for asset protection, people often use states like Nevada, South Dakota, or Alaska because they have more robust, liberal asset protection rules. In New Jersey, at least with the clients I deal with, that’s normally not the case. I don’t know if that answers your question, but those are some of the ways a revocable trust acts during life and what happens when someone passes away.
Yeah, that’s exactly what I was looking for — just the transition from revocable to irrevocable at death and what happens legally. Can the trust receive assets after death in the form of beneficiary designations? I imagine it’s better to have assets titled in the trust, but can you set the trust as a beneficiary and achieve the same result?
Sure. Two things come to mind with that question. Individually titled assets — assets solely in the deceased person’s name — are addressed through what estate planning lawyers call a “pour-over will.” Anything individually titled that someone fails to place in the trust while alive will pour into the trust at death and then be administered based on trust terms.
A pour-over will is a catch-all. Whether intentional or an oversight, people commonly leave something out. Some people are diligent and get everything into the trust — in that case, probate might not even be necessary — but usually there’s something that will need to transfer through the will.
In plain English, the will says: anything in my individual name that’s not already in my trust pours in upon my death and is distributed according to the trust terms.
There are other types of assets — retirement accounts, life insurance policies — where custom language can be added to beneficiary designations. Carriers have internal processes to do this, but you can list trusts as a beneficiary of those assets, and they will flow into the trust upon death as well.
Now that someone has the trust set up — in terms of maintenance, are there things to keep in mind? How often should someone review or update it?
For maintenance, particularly with irrevocable trusts, you want to make sure you have a team — financial professionals or accountants — ensuring you’re managing investments prudently and filing any necessary tax returns. With certain trusts, there are requirements to send out Crummey notices annually, so there are little maintenance tasks to complete.
As for reviewing trusts, in my world we tell people they should review their plan at least every five years. That’s the number I heard when I started practicing, and I never really questioned it, but as I gained experience, it made sense. Five years is a safe period to assume family dynamics may change. Relationships change. People get married, divorced, have children, die — and tax laws change.
People often come in with wills from 30 years ago. It’s fine — they’re dealing with it now — but I would review my plan more often than that.
I’m getting toward the end here, but I want to give listeners an idea of what the process looks like and specifically how you work with new clients. Let’s say they don’t have any estate planning documents and are considering a trust. What does the process look like, and what do you recommend?
In my process, an individual is usually referred to me or finds us online. I’ll usually have an intro call to get a general sense of what they want to do, because that helps guide the conversation and determine which questions I need to ask.
I send what we call an “estate planning questionnaire.” It’s not a ton of work, but it helps me analyze their situation — family structure, health, asset profile, both now and in the future — and that frames the conversation.
Then I set up a consultation at my office — those are free. Once we land on a plan they feel comfortable with, they’ll formally engage with us. We draft documents, they review them, ask questions, request any changes, and once they’re satisfied, we schedule a signing. They sign their documents and are finished for the moment.
Again, you want to stay on top of your plan and be alert to tax law changes. That’s basically it.
Excellent. Well, thanks for sharing that. That’s all the questions I have today. This has been great — I really look forward to sharing it. This is something we take very seriously in our practice. If there are listeners out there who don’t have this stuff in place, my hope is that they engage with you or someone else and get this done. It’s not the sexiest thing to think about — you don’t wake up excited to do estate planning — but it’s really important.
So I really appreciate having you on today and sharing your insights. And thank you to everyone who joined us on this episode of The Agent of Wealth. Before we go, I’d love for you to share how listeners can get in touch with you and where they can learn more.
One way is to reach out to my firm, Law Offices of Peter G. Aziz & Associates, in Clifton. You can find my email on our website. Another way is through you, Marc and the Bautis Financial team — we have a good relationship, we talk all the time, and if you believe someone is a good fit, I always enjoy working with them.
I also have professional social media — LinkedIn, and since I’m a millennial, I have an Instagram where I post information. It might sound farfetched to find your lawyer on Instagram, but 10 years from now, it might not be unusual. My handle there is @Szieber_Wills_Trusts_Estates.
Great. We’ll link to that in the resources section of the show notes. Thanks again, Tom. And thank you to everyone who tuned into today’s episode. Don’t forget to follow The Agent of Wealth on the platform you listen from and leave us a review of the show. We are currently accepting new clients, if you’d like to schedule a 1-on-1 consultation with our advisors, please do so below.
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