How Wording, Format, and Omissions Can Make or Break Your NJ Trust

In Trusts, Every Word and Structure Matters

From one “harmless” sentence to a missing clause, the details of a trust can shape taxes, control, family harmony, and whether your plan works when it’s needed most.

Why Trust Details Matter So Much

A trust is not just a stack of paper. It is a set of legal instructions that banks, financial institutions, trustees, and courts are expected to follow—often years or decades after you sign it.

Two trusts can:

Use the same name (“Family Trust”),
Be signed on the same day,
Hold similar assets…

…and yet produce completely different outcomes because of differences in:

Wording
What is included or excluded
What was left unsaid (omissions)
Formatting and internal structure
Mistakes or contradictions

That is why the drafting of a trust matters as much as the decision to create one in the first place.

A Few Words Can Change Everything

Example – “For Health, Education, Maintenance, and Support” vs. “For Comfort and Happiness”

Many trusts use the HEMS standard—Health, Education, Maintenance, and Support—for distributions to beneficiaries.

Now compare:

Trust A:

“The trustee may distribute income and principal to my child for their health, education, maintenance, and support (HEMS) in the trustee’s discretion.”
Trust B:

“The trustee shall distribute income and principal as requested by my child for their comfort and happiness.”

Potential effects:

Trust A (HEMS)
- More likely to support asset protection, because the beneficiary cannot simply demand distributions for anything and everything.
- Often viewed more favorably in the context of creditor protection and estate tax planning.
- Gives the trustee a defined standard, but still flexibility.
Trust B (comfort and happiness)
- Much broader; a court may view it as giving the beneficiary effective control.
- Creditors, ex-spouses, or others might argue that, if the beneficiary can get money for “comfort and happiness,” those rights should be available to them as well.
- The trust may end up offering little or no asset protection.

A small change in language can turn a trust from a protective shield into something that is easy for courts and creditors to reach.

Example – “May” vs. “Shall”

Consider:

“The trustee may distribute…” vs.
“The trustee shall distribute…”

“May” gives the trustee discretion; “shall” creates mandatory distributions.

Practical differences:

Mandatory distributions (“shall”) can:
- Increase exposure to creditors (if money must be paid out whether or not it’s wise).
- Reduce flexibility when markets are down or the beneficiary is going through a rough period (addiction, divorce, lawsuits).
Discretionary distributions (“may”) can:
- Allow the trustee to slow or pause distributions during risky times.
- Support better investment and tax timing decisions.

The right choice depends on the client’s goals—but it must be made intentionally.

Inclusions, Exclusions, and Omissions

Sometimes the biggest problem in a trust is not what’s in it, but what’s missing.

Example – No Special Needs Language

Imagine a family with a child who is, or later becomes, disabled and dependent on government benefits such as SSI (Supplemental Security Income) or Medicaid.

Trust C leaves an outright share to that child at age 25, with no mention of special needs.
Trust D uses a Special Needs Trust (SNT, Special Needs Trust) structure for that child’s share, explicitly designed not to disrupt benefits.

Potential effects:

Trust C
- The child could receive a lump sum that disqualifies them from benefits.
- The family or a later attorney may need to go to court to create a “fix” trust, often at greater cost and stress.
Trust D
- The trustee can use funds for the child’s benefit without the child owning the assets directly, often preserving eligibility for key benefits.
- The trust can be tailored to support the child over their lifetime.

The omission of special needs planning is often unintentional—but it can drastically affect the most vulnerable family members.

Silence About Remarriage or Blended Families

Consider a trust for a married couple with children from prior relationships. If the trust says simply:

“On the first spouse’s death, everything stays in trust for the survivor, and then goes to the children.”

…but says nothing about:

Remarriage,
Additional children,
Stepchildren,
Or how long the surviving spouse controls the assets,

then the surviving spouse may, in practice:

Change beneficiary designations,
Change or restate their own estate plan,
Favor their biological children over stepchildren.

This can defeat the first spouse’s intent, even though the trust seemed “fair” at the time of signing. More precise inclusions—such as separate subtrusts, limits on amendment powers, or QTIP-style marital trusts—can avoid some of these issues.

Unfortunately, many even skilled and competent attorneys inadvertently include no wording at all on the topic of remarriage, sometimes because having the client "update" it later can mean more revenue for the lawyer - at the expense of your security. Thankfully, things are different at Simon Law Group.

Format and Internal Structure:

Not Just Cosmetic

Good trust drafting is not just about elegant sentences; it is also about how the document is organized.

Why Structure Matters

A well-structured trust typically has:

Clear Articles (e.g., Creation of Trust, Distributions, Trustees, Powers, Administrative Provisions).
Logical subsections and headings, so a bank or court can quickly find what they need.
Defined terms (like “issue,” “descendants,” “spouse,” “HEMS”) in one place, used consistently throughout.
Properly referenced cross-references (Section 3.2 actually points to Section 3.2).

Poor structure can lead to:

Provisions that directly contradict each other (for example, two different distribution ages).
Confusion over which article controls in a specific situation.
Increased risk that a court will interpret the trust differently from what the grantor intended.

Example – Conflicting Ages

Article 3 says: “Children receive their shares at age 25.”
Article 7 (added later) says: “Children receive their shares at age 30.”

If the drafting is sloppy and does not clearly state which provision controls:

The trustee may be unsure when to distribute.
Beneficiaries may disagree (some may demand early distributions).
A court may have to resolve the conflict, costing time and money.

A clean, consistent structure reduces these risks.

Mistakes and Contradictions:

How Errors Play Out

Even a relatively small drafting mistake can have large consequences.

Example – Wrong Beneficiary Name or Entity

A trust intends to leave 10% to a specific charity, but the name is outdated or slightly wrong.
The charity has merged, changed names, or has multiple local branches.

Result:

The trustee and the court may need to interpret the gift.
There can be disputes about which organization should receive the share.
In some cases, the gift may fail if it is too vague and no one can clearly identify the intended beneficiary.

Example – Copy/Paste from Another State

A trust drafted using language copied from another state’s law might:

Refer to statutes or procedures that do not exist in New Jersey.
Use concepts (like certain elective-share or community property notions) that do not fit NJ’s framework.
Create confusion about which state’s law applies, especially if there is property in multiple states.

The trust may still be “valid,” but its administration and interpretation can become significantly more difficult and expensive.

How Technology Helps

And Why Human Judgment Reigns Supreme

At Simon Law Group, LLC, the goal is to combine modern tools with experienced legal judgment.

Modern Tools

Without naming specific products, we use:

Advanced legal drafting platforms that help maintain consistency, update standard language, and reduce mechanical errors.
Current legal research systems that track changes in statutes, regulations, and case law relevant to New Jersey estate planning.
AI-assisted analysis tools to help with issue spotting, formatting checks, and staying current on evolving trust and tax topics.

These tools help us:

Stay aware of changes in procedures, regulations, and case law.
Spot potential internal conflicts or omissions in complex documents.
Draft with more speed, precision, and consistency.

Why Human Legal Judgment is Critical

Technology does not replace the role of a New Jersey trusts and estates attorney. It is a supporting tool, not the decision-maker.

When we create or update a trust or estate plan, attorneys still:

Interpret the client’s goals, family dynamics, and risk tolerance.
Decide which structures and provisions are appropriate (or inappropriate).
Evaluate tax and practical consequences.
Exercise professional judgment about tradeoffs (simplicity vs. protection, flexibility vs. certainty).

No tool or lawyer can guarantee perfection or any particular court outcome. The aim is to create a plan that is thoughtful, current, and drafted with enforceability in mind, based on the law and facts as they are known at the time.

Putting It Together:

How Careful Drafting Protects Your Intent

When wording, inclusions, structure, and technology all work together, a trust is more likely to:

Reflect your actual wishes in plain, enforceable terms.
Provide a clear roadmap for trustees and beneficiaries.
Integrate properly with beneficiary designations, Wills, and other documents.
Reduce the chance of surprises, disputes, or court intervention later.

When these elements are neglected, even well-meaning trusts can:

Trigger unnecessary taxes,
Disqualify beneficiaries from benefits,
Fuel family conflict, or
Require expensive court fixes.

Book A Strategy Call

📞 Call 800-709-1131 or visit our website to schedule a confidential Estate & Trust Strategy Session with Simon Law Group.

We’ll review where you are, where you want to go, and how to format a Trust to your advantage instead of your detriment. Let's get started.

New Jersey Trust Drafting & Design

Why Every Word in Your New Jersey Trust Matters

How Wording, Format, and Omissions Can Make or Break Your Trust