Judgments and trusts in probate in NJ

[Gursel Demir]

In her probated Will the deceased states that a Trust is to be set up for the benefit of her only son and everything is to go into that Trust. She names her granddaughter as the Trustee and the Executrix.

There are a number of judgments against the son, and the granddaughters position is that they do not attach to the property and do not have to paid at closing to clear title since he’s not the devisee.

I’m awaiting to hear what position the title co will take on this and in the mean time would love to hear from people who have had similar experiences.

Thanks

Gursel

[Rick H.]

My vote is to agree with Granddaughter. Judgment attaches to debtor personally, not a testamentary trust created for his benefit.

What I don't know is the status of the beneficial interest prior to the creation of the trust. If, like in CA, title to real estate transfers immediately upon death of the owner subject to administration of the estate, then I wouldn't think that there's any time which a creditor could intercept and interfere.

And then there's the issue as to the ability of a judgment creditor taking an aggressive position and attempting to penetrate the trust corpus. I Presume that there are (spendthrift and other) provisions that would make this difficult or impossible?

Anyway, if you are buying asset with insured title, you ought to be golden.