When you’re considering your estate planning options, a Nevada living trust can provide a variety of benefits. A revocable living trust (sometimes called an inter vivos trust) provides control over your assets and offers privacy and security.
Living trusts in Nevada
When you set up a living trust in Nevada, you are the grantor. As the grantor, you determine the terms of the trust and the assets that will go in it. You must name a trustee, the person who will manage the assets in the trust for your benefit, as you are the life beneficiary (the assets are there for your use and benefit during life). You may choose anyone to be your trustee, but most people select themselves. You also name a successor trustee, who manages the trust after your death and distributes the assets to your death beneficiaries.
It is generally beneficial to transfer as many assets as possible into the trust, however there are some assets that cannot be placed into the trust, such as retirement accounts. A revocable living trust can be changed or altered by you anytime during your life. You can even get rid of it entirely if you want. An irrevocable trust cannot be changed once it is created.
When you use a will to transfer your asset to your heirs, the will must go through probate, a court procedure that approves the will. Probate can take months and can be costly, involving an executor, attorney, and court costs. Your assets cannot be passed on until probate finally concludes. Nevada does not use the Uniform Probate Code, so its procedures are not considered to be streamlined. A trust allows you to avoid all of this. The trust does not need to be approved or viewed by any court. Your assets can be transferred upon your death if that is your wish, with no wait. A trust also allows you to avoid multiple probate proceedings if you have assets in more than one state. Nevada does have a small estate probate procedure available for estates worth less than $100,000, and in those cases, it may be more cost effective than a trust.
Do I need a living trust in Nevada?
Privacy is one of the key benefits of a living trust Nevada. A will becomes public record when it goes through probate. A trust does not become public record. Your assets, beneficiaries, and the terms of the trust remain private. Additionally, a trust is harder to contest, so you wishes are more likely to be carried out.
Another benefit is that a revocable living trust protects you should you become mentally incapacitated. All of your assets are already controlled, owned, and managed by the trust and a conservatorship proceeding is likely unnecessary. Your financial life is protected by the trust.
When you create a living trust in Nevada, it places you squarely in control of your assets both during life and after death. During your lifetime, you as trustee manage your assets as you continue to live your life normally —living in your home, driving your car, spending your money, and even giving away or selling assets. After your death, the provisions you have set up in the trust take over, and your trustee distributes your assets as you have directed. This can be immediate, or it can take place on specific dates and events, such as milestone birthday. If you pass your assets with a will, they are all transferred when probate concludes.
Living trusts and estate taxes in Nevada
Your revocable living trust cannot protect you from estate taxes. Nevada does not have an inheritance tax, but the federal government applies tax to estates in excess of $5 million. It is possible to avoid estate tax using specially constructed trusts called AB trusts (also known as marital trusts or QTIP trusts). These pass assets from a deceased spouse to the surviving spouse with no applied tax. Revocable living trusts cannot protect assets from Medicaid spend down or from creditors.
How to Create a Living Trust in Nevada
Creating a living trust in Nevada is accomplished when you do two things. You must sign the trust document before a notary. Secondly, you must fund the trust by transferring ownership of your assets to its name. This last step is crucial for the trust to be effective. A living trust allows you to manage assets during life and have a plan in place for their distribution after your death. A trust may be right for you.
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