Estate planning can help recent Powerball winner and others

New Jersey residents may recall hearing about the 44-year-old Dominican immigrant who recently won the Powerball jackpot. According to northjersey.com, the man opted for a lump sum payment of approximately $211 million, which was reduced to $152 million after taxes.

More money means more responsibility and potential disruption to personal life

A group of financial advisors was interviewed and asked to give advice to the man regarding how to handle his newfound wealth.

One of the advisors stated that the unexpected windfall the man has received will mean additional responsibilities and significant changes to his personal life. For example, the man and his family were advised to change all of their cell phone numbers to prevent unwanted attention from both friends and strangers.

A lottery spokeswoman points out that the lottery does not provide financial advice or any form of financial planning assistance for lottery winners. For this reason, the man was advised to hire a team of professionals to assist with money management. These professionals include individuals such as an estate planning attorney, an accountant and a wealth manager.

A trust helps individuals protect assets and avoid the probate process

In terms of how to manage the money itself, one advisor recommends that the man place a portion of the money in a family trust account. This ensures privacy and provides protection against potential lawsuits.

A trust is a valuable estate planning tool. A trust helps individuals manage and protect property. To create a trust, the owner of property transfers the legal ownership of the property to a trust. A trustee manages the property for the beneficiary of the trust, who is an individual or organization selected by the property owner.

There are two different types of trusts. In a testamentary trust, property is transferred to the trust only after the death of the property owner. The other type of trust is called a living trust.

The lottery winner described in the story above may benefit from creating a living trust. A living trust operates in the same manner as a testamentary trust, but starts during the life of the property owner. A living trust may also continue after the property owner's death.

A living trust can be revocable or irrevocable. A revocable trust simply means that the property owner retains the power to modify or revoke the terms of the trust during his or her lifetime. This power is abandoned in an irrevocable trust, which contains permanent terms that cannot be modified.

Both types of living trusts are popular choices for individuals with a substantial amount of assets because they help avoid the probate process. However, all assets must be transferred into a trust upon the death of the property owner in order to fully avoid the probate process.

A "pour-over" will is an ideal solution in this case. In a pour-over will, all assets not in the trust are automatically transferred into the trust at the time of the property owner's death, so the probate process can be avoided.

There are several other types of trusts that can be created with the help of an experienced estate planning attorney. A qualified estate planning attorney can help individuals achieve their estate planning goals and provide peace of mind.